St. Louis-based Ascension is continuing to scale back its health insurance business, shedding ownership stakes in health plans and redirecting capital toward its core strength: care delivery.
The latest move is Ascension’s agreement to sell its ownership stake in Arizona managed care plan Mercy Care — an Arizona Medicaid managed-care organization — to CVS Health subsidiary Aetna. San Francisco-based Dignity Health, part of Chicago-based CommonSpirit, has also agreed to sell its stake in the jointly owned plan to the insurer. The transaction is subject to regulatory approval and is expected to close in fiscal 2027.
Aetna has managed Mercy Care’s daily operations and administrative services for more than 20 years.
Saurabh Tripathi, executive vice president and CFO of Ascension, told Becker’s the decision reflects the system’s broader strategy to focus on its strengths as a healthcare provider rather than an insurer.
“The insurance part is probably not our core strength,” he said. “From a core strategy perspective, Mercy Care didn’t fit really well with Ascension or CommonSpirit, and it was a strategic move for both of us to give this ownership to someone who knows the health plan really well, Aetna.”
Mr. Tripathi said the sale is expected to free up at least $1 billion for the two health systems combined, with both planning to redeploy the capital into their provider operations.
The Mercy Care transaction is the latest in a series of moves by Ascension to reduce its direct involvement in health insurance.
In November 2023, Ascension Wisconsin sold its 50% ownership stake in Network Health to Milwaukee-based Froedtert Health, giving Froedtert full ownership of the insurer. Ascension Wisconsin maintained its provider agreement with the health plan following the transaction.
Ascension announced plans to exit the ACA marketplace in Texas, effective Jan. 1, 2025. The withdrawal ultimately extended across its marketplace business, with Ascension Personalized Care also ending marketplace coverage in Indiana, Kansas and Tennessee in 2025.
The system has also stepped away from direct ownership of its former Medicare Advantage venture with Centene. The companies announced plans for a joint venture in 2018, which operated under the Ascension Complete brand. The plan rebranded as Wellcare Complete in 2024.
An Ascension spokesperson told Becker’s the system does not have an ownership stake in Wellcare Complete.
Ascension has not entirely severed its financial ties to the insurance business, however. The system maintains a 20% ownership stake in Detroit-based Henry Ford Health through their Michigan joint venture. Henry Ford owns Health Alliance Plan, giving Ascension an indirect interest in the insurance business.
The Mercy Care transaction also underscores Ascension’s ongoing relationship with CommonSpirit as both Catholic health systems reshape their portfolios.
Mr. Tripathi said leaders from the two organizations regularly discuss ambulatory strategy, federal advocacy, revenue cycle operations and managed care as they navigate broader industry challenges.
“We constantly talk about our ambulatory strategy, how can we partner together in different states,” he said. “There are opportunities for both of us to work together as we think about H.R. 1 headwinds, as an example. How do we provide our voice in advocacy as senators on the Hill are trying to craft healthcare policy?”
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