Centene said the approval process for its
acquisition of WellCare Health Plans “is ahead of schedule” with just two
states and the federal government needed to approve the merger.
The New York State Department of Financial
Services and Department of Health “joined 24 other states in issuing
approvals,” Centene chairman and chief executive Michael Neidorff said Tuesday when
the company announced its third-quarter earnings.
Neidorff said the WellCare acquisition, which
would give the larger Centene business in all 50 states, still needs approval
in Illinois and New Jersey as well as clearance by the U.S. government. The
U.S. Justice Department has been reviewing the transaction and some medical
care providers, including the American Hospital Association, have asked the government to take a
close look at the merger, fearing a threat to competition.
But Centene said the companies expect the
transaction will be completed by the first half of 2020 and Neidorff told
analysts Tuesday morning the approval could come earlier than expected.
Centene, which is focused on providing
government-subsidized healthcare coverage to Americans, said its third-quarter net profits increased
to $95 million, or 23 cents a share, from $19 million, or five cents a share in
the third quarter of last year. Revenue rose to nearly $19 billion from $16.2
billion thanks to growth in sales of subsidized individual coverage under the
Affordable Care Act.
Centene is the largest provider of individual
coverage known as Obamacare with nearly 1.9 million health plan members who buy
such coverage in 20 states on government exchanges.
Centene announced plans on March 27 to buy
WellCare for more than $15 billion in a deal that would expand the business of
administering Medicaid benefits for poor Americans as well as private Medicare
Advantage coverage.
Centene’s WellCare transaction would put the
combined company in all 50 states, creating a larger player in the business of
administering Medicare Advantage. Centene already sells Medicaid benefits in
contracts with many states and is the largest provider of individual coverage
under the Affordable Care Act, offering subsidized Obamacare in 20 states.
Centene is expanding in 10 of these states for 2020.
Centene has said its proposed acquisition of WellCare will give the
combined company 22 million members in all 50 states and combined revenue
approaching $100 billion.
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