Health insurers Centene Corp. and WellCare
Health Plans said they expect to close their $17 billion merger on Thursday,
creating one of the largest providers of government-sponsored health plans with
roughly 22 million members.
The insurers announced late Tuesday that they
have cleared all the necessary regulatory hurdles to close the deal, including
passing a review by the U.S. Justice Department. The companies previously
entered agreements to divest parts of their businesses in several locations,
all of which will be completed this week.
The American Hospital Association had urged the Justice Department to thoroughly review the
merger, arguing it could reduce competition among managed Medicaid, Medicare
Advantage and Affordable Care Act marketplace plans.
"We are pleased to achieve this milestone
and look forward to closing our acquisition of WellCare and providing more
members and communities access to high-quality healthcare," Centene
President and CEO Michael Neidorff said in a written statement. "We also
look forward to building on our relationships with providers and government
partners through the combined company's wide range of affordable health
solutions."
St. Louis-based Centene and Tampa, Fla.-based
WellCare first announced merger plans in March 2019. While the
merger cements Centene as a leader in Medicaid managed care, the insurer also
hopes adding WellCare will bolster its presence in Medicare Advantage, a
lucrative, fast-growing segment of the health insurance industry.
During the annual J.P. Morgan Healthcare
Conference last week, Neidorff explained he is disappointed in Centene's Medicare Advantage performance
and may turn WellCare into a Medicare brand after the merger is complete.
Combined, the companies would serve roughly 12.8 million Medicaid members and
about 1 million Medicare Advantage members. Other customers include individual
exchange plan, Medicare prescription drug plan, and Tricare members.
Centene has estimated that the companies'
combined revenue would near $100 billion. Neidorff is poised to become chairman
and CEO of the merged health insurer, while WellCare CEO Kenneth Burdick and
Executive Vice President Drew Asher will stay on in executive leadership positions.
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