Ascension Sells Mercy Care Stake to Aetna

The financial terms of the transaction were not disclosed. The deal remains subject to regulatory approval, and the companies have not announced a specific closing date.

Ascension is selling its ownership stake in Mercy Care, an Arizona Medicaid insurer, to CVS Health-owned Aetna, as the nonprofit health system continues to reduce its exposure to health insurance operations.

The financial terms of the transaction were not disclosed. The deal remains subject to regulatory approval, and the companies have not announced a specific closing date.

Ascension has co-owned Mercy Care with CommonSpirit Health’s Dignity Health since the managed care organization was established in 1985. Aetna has administered Mercy Care’s day-to-day operations since 2002, according to an Aetna spokesperson.

Mercy Care serves approximately 404,000 members across Medicaid and plans for beneficiaries eligible for both Medicare and Medicaid in Arizona. The insurer reported $34 million in income last year, according to tax documents.

The transaction is the latest in a series of portfolio changes by Ascension following several years of financial pressure driven by rising expenses and the impact of a major cyberattack in 2024.

Ascension has divested several hospitals and acquired ambulatory surgery provider AmSurg as it shifts greater focus toward outpatient care. The health system also exited the Texas Affordable Care Act marketplace in 2024 and sold its stake in Network Health to Froedtert Health in 2023.

The changes have coincided with an improvement in Ascension’s financial performance. The health system reported $1.5 billion in net income for fiscal 2026, compared with $918 million in the previous fiscal year.

For Aetna, the acquisition adds ownership of a health plan it has administered for more than two decades. The insurer covers approximately 26 million people and has recently streamlined parts of its insurance business, including exiting ACA marketplaces for 2026 and reducing its Medicare Advantage footprint.

Mercy Care’s dual-eligible business may also be relevant to the transaction. Dual-eligible special needs plans serve beneficiaries enrolled in both Medicare and Medicaid. These members generally have more complex healthcare needs, resulting in higher government payments than for standard Medicare Advantage coverage.

Aetna has expanded its focus on dual special needs plans in recent years.

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