Shareholders of Centene and WellCare Health Plans on Monday approved a proposed merger between the two insurers.
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Centene in March announced that it would buy WellCare Health Plans for about $15.3 billion—a move that would increase Centene's Medicare Advantage (MA) business and further solidify the insurer as the biggest insurer of Medicaid managed care plans.
Centene, based in St. Louis, had revenue of $60.1 billion in 2018, with membership of around 14 million across Medicaid, Medicare, TriCare, commercial, and correctional plans. Centene is the largest Medicaid managed care provider in the United States, covering more than 12 million beneficiaries.
WellCare, based in Tampa, Florida, had revenue of around $20.4 billion in 2018, with around 5.5 million people enrolled in its plans. WellCare as of December 2018 had 3.9 million beneficiaries enrolled in Medicaid managed care plans, with the rest of it members in MA and Medicare Part D plans.
The combined entity is projected to have revenue of about $97 billion in 2019 on a pro forma basis and 22 million members nationwide—making it the third biggest insurer, after UnitedHealthcare and Anthem (and around the same size as Aetna).
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On Monday, shareholders holding about 85% of Centene stock and shareholders holding about 83% of WellCare stock cast their votes on the deal, the companies said in a release. About 99% of voters voted in favor of the deal.
According to Forbes, the shareholder approval marks "a big milestone for the deal," as earlier reports had said some hedge funds wanted Centene to consider different options.
The deal requires approval from the Department of Justice as well as insurance regulators in 26 states. Centene said the companies have already received conditional approval in Alabama, Arkansas, Kentucky, and Missouri.
The companies expect the deal to be completed in the first half of 2020 (Centene release, 6/24; Japsen, Forbes, 6/24; Sibi Joseph, Reuters, 6/24).