Ascension is selling its ownership stake in Mercy Care — an Arizona Medicaid insurer covering roughly 404,000 members — to CVS Health-owned Aetna. The move is the latest in a string of divestitures as Ascension works to streamline its business after years of financial losses, including a major 2024 cyberattack. The nonprofit has already exited Texas' ACA market, sold its stake in Wisconsin insurer Network Health, and pivoted toward outpatient care through acquisitions like AmSurg.

The deal makes strategic sense for both sides. Ascension gets to shed insurance risk in an environment of mounting medical costs and regulatory uncertainty, while Aetna — which has already managed Mercy Care's day-to-day operations since 2002 — acquires a plan it knows intimately. Aetna has been doubling down on dual special needs plans (D-SNPs), which serve members enrolled in both Medicare and Medicaid and tend to generate higher margins due to more complex patient populations.

By the Numbers:

• ~404,000 members covered by Mercy Care across Medicaid and dual-eligible plans
• $34M in income reported by Mercy Care last year
• $1.5B in net income reported by Ascension for fiscal year 2026, up from $918M the prior year
• Aetna covers approximately 26 million people nationally

Why it matters: This deal reflects a broader industry trend of integrated health systems exiting insurance businesses as costs and regulatory pressures mount — while specialized, high-margin plans like D-SNPs remain attractive targets for major payers looking to grow profitably.