Understanding the Centene-WellCare Merger

Late last year, St. Louis-based Centene Corporation received permission from all 27 states necessary to move forward with its acquisition of WellCare Health Plans, an article from FierceHealthcare says. The $17 billion deal was finalized in January and “[created] one of the nation’s largest government plan insurers for Medicare, Medicaid and the Affordable Care Act (ACA) exchanges,” the article says. The merger positions Centene as the fourth-largest payer in the private Medicare space, including Medicare Advantage and Part D plans, and will now provide healthcare coverage for 22 million members across all 50 states.

“With the addition of WellCare, we are creating a combined company that is better able to serve members and help them achieve better health outcomes,” Centene CEO Michael Neidorff said in an article in Forbes. “Centene and WellCare will continue to move forward with federal and regulatory approvals with a focus on improving quality for recipients, fair compensation for providers, and savings for states.”

Currently, Centene serves about 2 million ACA customers in 20 states, but plans to increase its footprint and add 10 additional states. According to FierceHealthcare, it also plans to test new care models that are more patient-centric, and “focus on supporting health for its members as well as addressing social needs that impact health.”

Modern Healthcare reports that at a recent J.P. Morgan Healthcare Conference, Neidorff said he may turn WellCare into a Medicare brand, which would serve 12.8 million Medicaid members and 1 million Medicare Advantage members. Modern Healthcare says that “other customers include individual exchange plan, Medicare prescription drug plan and Tricare members.”

According to S&P Global, Centene is expected to provide a variety of products in different states, including:

• Health plan operations: Alaska, Colorado, Delaware, Idaho, Maryland, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, Oklahoma, Rhode Island, South Dakota, Utah, Vermont, Virginia, West Virginia, Wyoming
• Medicaid or Medicare: Alabama, Connecticut, Iowa, Maine, Nebraska, Nevada, Tennessee, Washington
• Medicaid and Medicare: Hawaii, Kentucky, Louisiana, Michigan, New Jersey, New Mexico, Wisconsin
• Medicaid/Medicare/Marketplace: Arizona, Arkansas, California, Florida, Georgia, Illinois, Indiana, Kansas, Mississippi, Missouri, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Texas

What Does This Mean for Consumers?

Edwards Electronic Processing says that the fate of the contracts that healthcare providers have with Centene and WellCare is yet to be determined; it’s possible that Centene’s contracts may replace WellCare’s altogether. Outcomes may vary by state; for example, in Florida, Sunshine pays therapy through American Therapy Administrators (ATA), while WellCare pays fee-for-service. If Centene’s processes overrule WellCare’s, many Medicaid members’ therapy would be handled by ATA.

Ultimately, Centene’s goal is to “overcome the four obstacles that handicap members in the healthcare system: affordability, access to care, quality of care, and care coordination,” Health Payer Intelligence says.

For more information about the Centene-WellCare merger, visit centene.com.