Two sizable forces in the managed Medicaid sphere are joining forces to create a powerhouse, covering 22 million beneficiaries spread throughout all 50 states.
St. Louis-based Centene Corp. on Wednesday announced that it plans to acquire smaller rival WellCare Health Plans in a deal valued at $17.3 billion. Benefits of the transaction, leaders said, include expanding the combined organization’s national footprint and capitalizing on economies of scale to save $500 million annually by year two.
“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 Chairman and CEO Michael Neidorff said in the announcement.
Niedorff will pilot the combined company, which will call St. Louis its home base. Officials said they hope to close the transaction in the first half of 2020, pending approval from regulators and both companies’ shareholders. Combined, they expect to pull in $97 billion in revenues this year, managing Medicaid coverage for more than 12 million individuals and several million more in Medicare.