- Medicaid insurer Centene has purchased Health Net in a deal announced Thursday worth $6.8 billion.
- The deal is intended to boost Centene's Medicaid business in the lucrative California market. The company anticipates that the acquisition will make it the largest Medicaid insurer in the country, with roughly 6 million members.
- Health Net is California's fourth-largest insurer and provides Medicaid coverage to nearly 1.4 million California residents.
"Centene is the largest Medicaid managed-care company but has only minor market share in California, where Health Net has been rapidly growing in Medicaid," said Peter Costa, a senior healthcare analyst at Wells Fargo. "Centene and Health Net don't desire to be left out of the consolidation wave."
The deals may not be done yet for Centene and Health Net, according to Leerink Partners Ana Gupte. "We expect UnitedHealth could come in with a competing bid for either Health Net or Centene or both," Gupte said.