Universal American

Universal American was a United States health-insurance company headquartered in Rye Brook, New York. It developed from a stock health insurer incorporated in 1945 as American Progressive Health Insurance Company of New York and later operated through a series of corporate names, acquisitions, and portfolio expansions. Its business ultimately centered on government-sponsored health coverage, especially Medicare Advantage-style managed care and Medicare Part D prescription-drug benefits, while also maintaining life and health-insurance subsidiaries. The company’s transformation accelerated after Richard A. Barasch became chairman and chief executive officer in 1991. During the late 1990s, the business, then known as American Exchange, entered into a transaction with Capital Z Financial Services. In 1998, Capital Z acquired an approximately 59.7 percent controlling interest for about $81 million. Universal American used the transaction proceeds to expand through the acquisition of several former PennCorp Financial Group subsidiaries, including Pennsylvania Life Insurance Company, Constitution Life Insurance Company, Union Bankers Insurance Company, Marquette National Life Insurance Company, PennCorp Life Insurance Company of Canada, and Peninsular Life Insurance Company. A major strategic shift came in 2007, when Universal American acquired MemberHealth, a privately held pharmacy-benefit manager and sponsor of Community Care Rx. The transaction gave Universal American a substantial Medicare Part D platform and broadened its role from traditional insurance into pharmacy-benefit administration and prescription-drug coverage. Community Care Rx was reported to have more than 1.1 million members at the time of the acquisition. Universal American subsequently concentrated more heavily on Medicare-related activities. In 2011, CVS Caremark acquired the company’s Medicare Part D business for approximately $1.25 billion. The divestiture involved a Part D membership base of about 1.9 million and significantly expanded CVS Caremark’s presence in the Medicare prescription-drug market. In December 2011, Universal American Financial Corporation changed its name to Universal American Corporation and moved its listing to the New York Stock Exchange under the symbol UAM, presenting the exchange listing as part of the company’s evolution and increased visibility. In 2016, WellCare acquired Universal American in a transaction reported at approximately $800 million. The acquisition brought Universal American’s Medicare-related assets and capabilities into WellCare’s health-plan portfolio. Following that transaction, Universal American ceased operating as an independent publicly traded company. Its historical significance lies in its transition from a regional insurance company into a diversified Medicare-focused organization, followed by the sale of its prescription-drug operation to CVS Caremark and eventual acquisition by WellCare.

Universal American originated as American Progressive Health Insurance Company of New York, which was incorporated as a stock health-insurance company on September 22, 1945. Over subsequent decades, the organization changed names and expanded beyond its original insurance activities. By the late twentieth century it was operating as American Exchange and was pursuing a broader financial and insurance strategy. Richard A. Barasch became chairman and chief executive officer in 1991. His tenure coincided with the company’s transition toward a more diversified insurance and benefits group. In 1998, Universal American Financial Corporation reached a share-purchase agreement with Capital Z Financial Services, a New York private-equity firm. Capital Z obtained approximately 59.7 percent control for about $81 million. Universal American used proceeds from the transaction to purchase several subsidiaries formerly associated with PennCorp Financial Group. These included Pennsylvania Life Insurance Company, Constitution Life Insurance Company, Union Bankers Insurance Company, Marquette National Life Insurance Company, PennCorp Life Insurance Company of Canada, and Peninsular Life Insurance Company. The company later made Medicare and pharmacy benefits central to its growth strategy. In 2007, Universal American acquired MemberHealth, a privately held pharmacy-benefit manager and sponsor of Community Care Rx. The acquisition added a national Medicare Part D platform and was associated with more than 1.1 million members. This broadened Universal American’s business from conventional insurance underwriting into managed-care administration, prescription-drug benefits, and pharmacy-benefit services. Universal American’s Medicare Part D operation was sold to CVS Caremark in 2011. The transaction was valued at approximately $1.25 billion and involved a business serving about 1.9 million members. For CVS Caremark, the purchase materially increased its Medicare prescription-drug membership. For Universal American, the sale represented a significant portfolio decision and a move toward reshaping its remaining Medicare and insurance operations. Also in 2011, Universal American Financial Corporation changed its name to Universal American Corporation. The company listed on the New York Stock Exchange under the symbol UAM. The exchange move was presented as a milestone intended to improve the company’s visibility among customers, investors, and the broader financial market as its operations became more diversified. Universal American remained associated with Medicare managed care and other health-benefit activities until its acquisition by WellCare in 2016. The deal was reported at approximately $800 million. WellCare’s purchase ended Universal American’s status as an independent publicly traded company and absorbed its business into WellCare’s health-plan operations. Universal American is therefore best understood historically as a health-insurance and Medicare-benefits company rather than as an active standalone consumer brand.

1. 2016Acquisition by WellCare

   WellCare acquired Universal American in a transaction reported at approximately $800 million.

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2. 2011Sale of Medicare Part D business to CVS Caremark

   CVS Caremark acquired Universal American’s Medicare Part D business for approximately $1.25 billion.

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3. 2011Corporate renaming and NYSE listing

   The company adopted the name Universal American Corporation and listed on the New York Stock Exchange under UAM.

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4. 2007MemberHealth acquisition

   Universal American acquired MemberHealth and its Community Care Rx Medicare Part D platform.

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5. 1998Capital Z takes controlling interest

   Capital Z Financial Services acquired approximately 59.7 percent of the company and provided capital for an acquisition-led expansion.

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6. 1991Richard A. Barasch becomes chairman and chief executive

   Richard A. Barasch was elected chairman of the board and chief executive officer.

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7. 1945Incorporation as American Progressive Health Insurance Company of New York

   The company was incorporated on September 22, 1945, as a stock health-insurance company.

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A Medicare-focused health-insurance and benefits platform that combined managed-care plans, prescription-drug coverage, pharmacy-benefit administration, and legacy life-insurance operations.

• Medicare managed-care plansHealth insurance

  Universal American offered managed-care health plans for Medicare beneficiaries. These plans formed part of the company’s later strategic focus and placed it within the United States government-sponsored senior-health insurance market.

• Community Care RxMedicare Part D and pharmacy benefits

  Community Care Rx was a national Medicare Part D plan sponsored by MemberHealth. Universal American obtained the platform through its 2007 MemberHealth acquisition, adding prescription-drug coverage and pharmacy-benefit capabilities to its insurance portfolio.

• Medicare Part D benefitsPrescription-drug insurance2007

  The company operated Medicare prescription-drug benefits and built a sizable Part D membership base through MemberHealth and Community Care Rx. Universal American sold this business to CVS Caremark in 2011.

• Life and health insuranceInsurance

  Through acquired subsidiaries, Universal American maintained life- and health-insurance operations. The portfolio included Pennsylvania Life Insurance Company, Constitution Life Insurance Company, Union Bankers Insurance Company, Marquette National Life Insurance Company, PennCorp Life Insurance Company of Canada, and Peninsular Life Insurance Company.

• 2016Acquisition by WellCareM&A

  Universal American was an established Medicare and health-benefits company operating in a sector undergoing consolidation.

  What changed. WellCare acquired Universal American.

  Aftermath. Universal American ceased to operate as an independent publicly traded company and its activities were incorporated into WellCare.

  Estimated transaction value. $800 million (2016)

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• 2011Sale of Medicare Part D business to CVS CaremarkStrategy

  Universal American reassessed its portfolio after building a substantial Medicare prescription-drug operation.

  What changed. It sold the Medicare Part D business to CVS Caremark.

  Aftermath. CVS Caremark increased its Medicare Part D membership substantially, while Universal American continued with its remaining health-plan and insurance activities.

  Sale value. $1.25 billion (2011)

  • CVS Caremark — CVS Caremark described the transaction as strengthening its position in a rapidly growing pharmacy-benefit segment.
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• 2011Corporate name change and NYSE listingOther

  The company had expanded and diversified beyond its earlier corporate structure and sought greater visibility in financial markets.

  What changed. Universal American Financial Corporation changed its name to Universal American Corporation and listed on the New York Stock Exchange under UAM.

  Aftermath. The listing marked a new phase in the company’s public-market identity before its eventual acquisition by WellCare.

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• 2007Acquisition of MemberHealthM&A

  Universal American was expanding into Medicare prescription-drug coverage and pharmacy-benefit management.

  What changed. The company acquired MemberHealth, including its sponsorship of the Community Care Rx Medicare Part D plan.

  Aftermath. The acquisition gave Universal American a national Part D platform with more than 1.1 million members reported at the time.

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• 1998Accepting Capital Z’s controlling investmentM&A

  Universal American sought capital to expand its insurance operations after operating under the American Exchange name.

  What changed. The company entered into a share-purchase agreement under which Capital Z Financial Services acquired approximately 59.7 percent of the business for about $81 million.

  Aftermath. The proceeds supported acquisitions of several former PennCorp Financial Group insurance subsidiaries.

  Transaction value. $81 million (1998)

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• 2016WellCare acquires Universal American

  WellCare acquired Universal American in a transaction reported at approximately $800 million, ending Universal American’s independent corporate existence.

  M&A
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• 2011CVS Caremark buys Universal American Medicare Part D business

  CVS Caremark acquired Universal American’s Medicare Part D business for approximately $1.25 billion, involving roughly 1.9 million members.

  M&A
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• 2011Universal American changes corporate name and moves listing to the NYSE

  Universal American Financial Corporation changed its name to Universal American Corporation and listed on the New York Stock Exchange under ticker UAM.

  Leadership changeOther
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• 2007Universal American acquires MemberHealth

  Universal American acquired MemberHealth, a pharmacy-benefit manager and sponsor of Community Care Rx, expanding its Medicare prescription-drug activities.

  M&A
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• 1998Capital Z acquires controlling interest in Universal American

  Capital Z Financial Services acquired an approximately 59.7 percent controlling interest in the company for about $81 million, providing capital for subsequent insurance-subsidiary acquisitions.

  M&A
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1. Universal American