Healthcare Entrepreneur Back in Business

Wednesday, Apr 14,2010, 11:33:25 PM   Click:

Armed with $150 million in investor money, veteran entrepreneur Miguel ``Mike'' Fernandez charged back into the health insurance market in a big way Tuesday with the purchase of Total Health Choice, betting that Medicaid HMOs are about to undergo a major expansion.

Total Health has 40,000 members in South Florida in Medicaid, the Florida Healthy Kids program and commercial insurance.

Fernandez didn't disclose the price of the purchase, but said it was ``the first of several moves in the next couple weeks'' that he plans to make for his new company, Simply Healthcare Plans, which he expects to eventually expand beyond Florida's borders.

Fernandez said he personally had put up about 80 percent of the $150 million, with a group of 28 associates with whom he's worked for the past quarter-century putting up the rest.

Fernandez said he's near closing on another deal for an insurer with about 10,000 members and is in discussions on a third company.

Medicaid has often been criticized in the healthcare industry because it is considered a low-paying state-federal insurance, but Fernandez said he has been able to successfully operate insurers at about 10 percent administrative costs ``while other companies are in the teens or 20s.''

Fernandez sold a previous company, CarePlus, to Humana for about $450 million in 2004 and been out of the business because of a noncompete clause that was part of the sale.

That clause has now expired, and he's moving back into the market.