A group of investors that had applied to acquire Evergreen Health said Wednesday that they were backing out of the deal, leaving the Baltimore-based health insurer’s future in doubt.
The investors said in a joint statement that “new financial information came to light that raised significant concerns” as they moved toward closing.
The investors were LifeBridge Health, Anne Arundel Health System and JARS Health Investments, a group of individual investors.
“Given this new information, as well as our fiscal responsibilities to our own organizations, we made the difficult decision that we could not move forward with this acquisition,” Neil Meltzer, president and CEO of LifeBridge Health, said in a statement. “We are truly disappointed as we had high hopes that we would be able to offer a stronger and more integrated health insurance option to Marylanders.”
The statement said the group had informed the Maryland Insurance Administration of its decision.
Evergreen, which offered insurance on the state’s health exchange and in its small business market, was one of 23 so-called consumer oriented and operated health plans created under the federal Affordable Care Act and one of the few still operating. It had sought investors to shore up its finances, which were burdened by an ACA rule that required it to make payments to insurers with sicker members, a figure that was $24 million last year.
Earlier this year, it received federal permission to convert to a for-profit insurer and be acquired by the investor group.
Evergreen founder Peter Beilenson said in a brief statement Wednesday that he was disappointed and raised doubts that the insurer could remain in business.
“I’m saddened that what was a national model, aligning an insurer with a system of primary care offices, will not continue to be an option for Maryland consumers,” he said. “There’s been tremendous efforts on all sides to make it work.”
Beilenson said the Maryland Insurance Administration would rule on whether Evergreen could continue but said the insurer “needed an acquisition to go on.”
Al Redmer Jr., Maryland Insurance commissioner, could not be reached for comment.
Maulik Joshi, executive vice president and chief operating officer of Anne Arundel Health System, said in a statement that the system was still committed to providing a health insurance option to Marylanders.
“This decision was not made lightly and came after a thorough and prudent due diligence process,” he said. “We are committed to expanding access to health care by providing an affordable health insurance option to Maryland citizens, and the ability to offer insurance products remains a strategic imperative for our health system.”
The statement said the investors will continue to seek options to bring a provider-sponsored health plan to Maryland.
Baltimore Sun reporter Andrea K. McDaniels contributed to this report.