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 DOJ to take a thorough look at 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 plans to merge in March 2019. While the merger cements Centene as a leader in Medicaid managed care, the insurer also hopes the addition of 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 a 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.