Centene Corporation and WellCare Health Plans will combine to produce a single company dominating the managed care payer space.
Managed care giant Centene Corporation has announced that it will acquire rival payer WellCare Health Plans, Inc. for $17.3 billion in cash and stock.
The latest mega-deal among key players in the health insurance space will create a new healthcare company focused on offering Medicare, Medicaid, and health insurance marketplace coverage.
“This transformational combination creates a leading healthcare enterprise that is committed to helping people live healthier lives through a localized approach and provides access to high-quality healthcare through a wide range of affordable health solutions,” said Michael F. Neidorff, Centene’s Chairman and Chief Executive Officer.
“With the addition of WellCare, we expect to bolster and diversify our product offerings, increase our scale and have access to new markets, which will in turn, enable us to continue investing in technology and better serve members with innovative programs designed to meet their needs.”
Centene offers administration of government-sponsored health programs including CHIP, Aged, Blind or Disabled (ABD), Foster Care, and Long-Term Services and Supports. The company also manages Medicare Part D prescription drug benefits, dual eligible programs, and Department of Defense coverage programs.
The payer also works with healthcare organizations to offer behavioral health management, care management software, dental and vision benefits management, commercial programs, home-based primary care services, life and health management, pharmacy benefits management, specialty pharmacy, and telehealth services.
Centene has 14 million managed care members, the company’s website said.
“Centene has grown significantly by adding capabilities that have increased revenues and enabled margin expansion,” said Neidorff.
“The addition of WellCare is the next logical step in our growth strategy and to drive value for our collective shareholders. We have long admired the WellCare organization and together look forward to building on our mission of transforming the health of our communities, one person at a time.”
WellCare Health Plans has a similar portfolio, but is somewhat smaller at 5.5 million members. WellCare focuses on Medicaid, Medicare Advantage, and Medicare Part D prescription drug plans. The company also offers coverage through the federal health insurance marketplace.
“We are enthusiastic about the opportunity to create a high-performing combined business focused on government-sponsored managed care that will bring benefits to all of our stakeholders,” said Ken Burdick, WellCare’s Chief Executive Officer.
“By combining with Centene, we will create a more competitive, diversified company that is better able to deliver fully integrated, high-quality, cost-effective services for our members and government partners.”
“Both companies share a deep history and focus on the government-sponsored healthcare market and, together, our expertise will allow us to deliver enhanced value for our shareholders, opportunities for our associates and better outcomes for our members.”
Neidorff will lead the new entity as chairman and CEO, while Burdick is expected to serve in a newly-created executive role within the combined company.
The transaction is anticipated to close in the first half of 2020 assuming the two companies can meet regulatory requirements and other customary conditions of closing.
Date: April 02, 2019