The sale of IlliniCare Health Plan by Centene is part of its efforts to close its $17.3bn acquisition of WellCare Health Plans
CVS Health to acquire IlliniCare Health Plan from Centene. Photo: courtesy of Tumisu from Pixabay.
US health insurer Centene has agreed to sell IlliniCare Health Plan, its Illinois health plan subsidiary, to CVS Health for an undisclosed price.
The transaction is being taken up by Centene as part of its efforts to close its previously announced $17.3bn acquisition of US health insurance company WellCare Health Plans.
As part of the deal, the company will be divesting its Medicaid and Medicare Advantage lines of business in Illinois to CVS Health.
CVS Health executive vice president and Aetna president Karen Lynch said: “Expanding our Medicaid and Medicare Advantage presence in Illinois will allow us to serve more members with our proven holistic approach that addresses physical, behavioral and social determinants of care.
“We look forward to working with Centene on a seamless transition and developing a deeper relationship with the state and local providers.”
Centene will retain IlliniCare’s Medicare-Medicaid Alignment Initiative (MMAI) business and its statewide YouthCare foster care contract, which is set to begin in February 2020. Centene’s Ambetter business in Illinois is not part of the deal as well.
The closing of the sale to CVS Health is subject to the US federal antitrust clearance, Illinois state regulatory approvals, and other customary closing conditions. It will also be subject to the completion of the Centene-WellCare deal, which is expected to occur in the first half of 2020.
Centene CEO comments on the transaction with CVS Health
Centene chairman, president and CEO Michael Neidorff said: “We are continuing to make progress towards completing our transaction with WellCare and the divestiture of our IlliniCare Health plan is the next step in that process.
“Our employees in Illinois have done an exceptional job serving our communities in the state. We are pleased to enter this agreement with CVS Health, under which these employees can continue helping members achieve better health outcomes while delivering benefits to providers.”
Centene, which signed a cash-cum-stock deal with WellCare in March 2019, has so far secured approvals from insurance and health care departments from 26 states.
The proposed merger is expected to create a new healthcare enterprise, which will be engaged in government-sponsored healthcare programmes. The new healthcare enterprise is also expected to become a major player in Medicaid, Medicare, and the health insurance marketplace, as per the parties.