Centene completes Fidelis Care buy
- Centene has completed its $3.75 billion acquisition of nonprofit insurer Fidelis Care, giving it a leading managed care market share in New York.
- With its expansion into New York, the country’s second largest managed care market by membership, Centene is active in the four largest managed care states: California, Florida, New York and Texas.
- Queens, N.Y.-based Fidelis serves more than 1.6 million members across the Affordable Care Act, Medicare Advantage and Medicaid markets. Patrick Frawley will continue to serve as Fidelis CEO, Centene said.
The purchase boosts Centene’s national membership to about 14 million members.
The insurer has performed well thanks to its ACA and Medicaid managed care portfolio and demonstrated interest in scaling up its business. In 2015, Centene purchased Health Net for $6.8 billion, which gave the insurer a substantial market share in California.
Centene, which specializes in government-sponsored health plans, reported better-than-expected earnings for the 2018 first quarter due to increased membership and lower Medicaid healthcare costs. The company retained 80% of its 2017 ACA exchange members to claim 1.6 million enrollees as of March 31 — up from 1.2 million the prior year Q1.
Centene saw its health benefits ratio, also known as medical loss ratio, drop to 84.3% from 87.6% in the same period last year, even amid a strong flu season.
The Fidelis deal was supposed to close in the first quarter, causing Centene to drop its annual guidance from a range of $6.95 to $7.35 in profit per share to $6.75 to $7.15.