Highmark, a health insurance, and charity that manages 13 hospitals, filed a petition with the Pennsylvania Insurance Department to buy a 50% share in Gateway Health. If authorized, Gateway would become a fully owned subsidiary of Highmark. It would continue to serve members with Medicaid and Medicare coverage, including those who are Medicaid and Medicare eligible.
- Deal: Gateway has about 355,000 members throughout Pennsylvania, which would be added to Highmark’s membership of more than 6 million. A Trinity Health spokeswoman said the company had sold its equity holdings in Gateway Health to Highmark. The deal comes as Medicaid enrollment has been growing.
- Revenue: Highmark claimed $18 billion in consolidated sales for 2020, with a $490 million operational profit and $450 million in excess revenue after costs or “profit.” Since the resignation of previous CEO Cain Hayes a few months ago, Highmark Health COO Karen Hanlon has been functioning as temporary CEO at Gateway.
- Eligibility: According to IBISWorld, a Los Angeles-based industry research organization, expanded eligibility is driving industry revenue growth as public health became a larger issue during the COVID-19 pandemic than in the past, pushing up expected revenue growth by 6.6 percent in 2021.
- Merger: With the conclusion of Highmark’s merger with Blue Cross of Northeastern Pennsylvania in June 2015, the planned purchase continues a membership growth streak that began with the completion of Highmark’s merger with Blue Cross of Northeastern Pennsylvania. Highmark gained 550,000 members in 13 counties because of the agreement.
- Perfect collaboration: “We have long contemplated full ownership of Gateway Health in collaboration with Trinity on the next generation of Gateway,” Highmark spokesman Aaron Billger said. “The timing was right, and the two organizations agreed.”