Humana enters $2.8B primary care joint venture with BlackRock

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Dive Brief:

• Humana has inked a new joint venture with BlackRock to operate about 150 of the insurer's senior primary care clinics, replacing an existing arrangement with a different investment firm.
• BlackRock is set to buy out private equity firm Welsh, Carson, Anderson & Stowe’s existing ownership stake in the clinics, valued at $2.8 billion, according to the Tuesday announcement. CenterWell will remain a minority owner and continue to manage the clinics with no changes to patient care.
• The deal is expected to close by the end of the year. Humana says the move will reduce liabilities on its balance sheet and unlock additional capital to support CenterWell’s growth.

Dive Insight:

Humana has been doubling down on primary care delivery in a bid to diversify its revenue in recent years, expanding CenterWell through a series of investments and acquisitions. The division has grown to operate more than 350 senior primary care locations through CenterWell Senior Primary Care and its sister brand, Conviva Senior Primary Care. 

Now, over the next two years, BlackRock, one of the biggest investment firms in the world, will use its deep pockets to fuel CenterWell’s growth, including by building clinics and pursuing new acquisitions, Humana said. 

Under the deal announced Tuesday, BlackRock will hold a majority stake in nearly 150 CenterWell clinics previously backed by WCAS.

The joint ventures with WCAS, established in 2020 and 2022, “were instrumental in successfully scaling CenterWell into the nation’s largest provider of senior-focused value-based primary care over the last seven years,” Humana said in a statement.

But the new joint venture with BlackRock offers greater financial and operational flexibility for Humana.

Humana says it expects a significant reduction in the liabilities on its balance sheet due to the removal of a “put option” in the new joint venture. A put option would essentially force Humana to buy back their equity stake in the clinics at a predetermined price, regardless of whether Humana wanted to make that purchase at that time. WCAS had a put option as part of its deal, but that clause has been removed for BlackRock.

Instead of a put option, CenterWell will have the option to purchase clinics from the joint venture beginning in 2028. If CenterWell hasn’t acquired all the clinics by the end of 2033, BlackRock will be able to exit the joint venture by selling the remaining clinics. CenterWell has the right to submit the first offer, if BlackRock decides to sell.

“All in, Humana anticipates a significantly lower cost of capital under the new joint venture, reflecting the maturity of the business,” Humana said in a statement.

Humana is scheduled to report its third quarter earnings on Nov. 6. Investors will be looking for color on the performance and maturity of CenterWell, as well as any details on the fine print of the joint venture and any protections provided to BlackRock, according to a note from J.P. Morgan analyst Lisa Gill.

Humana says the deal is not expected to impact its 2026 earnings forecast. The insurer has been experiencing a financial turnaround after losses in 2024 and 2025 spurred by unexpectedly high medical spending.