Massachusetts Residents Celebrate CareSource Acquisition of Commonwealth Care Alliance
Nearly 50,000 elderly, disabled, and low-income residents of Massachusetts can now feel assured about the continuity of their health insurance and coordinated care following a major acquisition in the healthcare landscape.
Commonwealth Care Alliance Acquired by CareSource
Commonwealth Care Alliance (CCA), which had been grappling with severe financial difficulties and raised concerns among MassHealth officials, has been acquired by CareSource, a nonprofit managed care organization based in Ohio. CareSource currently serves over 2 million members across 13 states, ensuring a steady and robust support system for its members.
Reassurance for Seniors and Vulnerable Populations
With this acquisition, Commonwealth Care Alliance will continue to operate its Senior Care Options (SCO) and One Care plans in Massachusetts as part of the CareSource family of brands. “The partnership between CareSource and Commonwealth Care Alliance guarantees that residents of Massachusetts with complex health needs retain access to high-quality healthcare services,” Erhardt Preitauer, President and CEO of CareSource, expressed in a statement.
Support from State Officials
Preitauer acknowledged the assistance provided by the state’s Executive Office of Health and Human Services and Gov. Maura Healey throughout the acquisition process. He emphasized the importance of collaborating with CCA colleagues and local healthcare partners to ensure exceptional service and outcomes for those relying on these vital healthcare plans.
Challenges Faced by Commonwealth Care Alliance
Founded in 2003, CCA had been recognized as a pioneering model for integrating insurance and healthcare for individuals who qualify for both Medicaid and Medicare. The organization provided a range of services, including medical and social support, physical therapy, personal care, and transportation. However, escalating financial losses—reportedly $14.3 million in 2022 and a staggering $105.8 million in 2023—led to significant operational challenges, including compliance issues with solvency requirements.
Acknowledgment of Financial Distress
Documentation revealed that MassHealth had warned CCA in October about its noncompliance with solvency reserve requirements, citing a deficiency exceeding $200 million. Projections indicated that CCA could face severe cash shortages by early 2025. These challenges left many CCA members deeply concerned about losing essential coverage.
CareSource’s Commitment to Quality Care
The acquisition comes as CCA was actively searching for a strategic partner to ensure its longevity. David Klein, the outgoing chairman of CCA’s board, noted that CareSource embodies the values essential for enhancing care for the populations served. Furthermore, the state has agreed to mitigate potential losses for CareSource over the next two years, ensuring that any surplus funds are directed towards repaying debts owed to MassHealth from CCA.
Ensuring Continuity of Care
As part of the transition, CareSource has committed to integrating CCA employees into its workforce of 4,700, which will help maintain continuity of care for all members and patients. Chris Palmeri, the President and CEO of CCA, has resigned as part of the changeover, paving the way for a new chapter in care provision for Massachusetts residents.
