Dive Brief:
- Centene Corp is considering purchasing the Medicare Advantage plans its rivals are likely to sell during insurance industry consolidations.
- Health insurance plans in the US are continuing to consolidate in order to cut costs and gain bargaining power.
- In the most recent flurry of consoliations, Anthem announced its intention to purchase Cigna Corp. and Aetna has agreed to buy Humana.
Dive Insight:
Before regulatory authorities allow the Anthem-Cigna and Aetna-Humana deals to go through, the companies will likely need to sell off some of their Medicare Advantage plans in counties where their combined market share is found to be anti-competitive.
Centene Chief Executive Michael Neidorff said on a conference call that the company is more likely to buy plans that are in its existing markets. "If it's in a new market, it has to have significant size and scale to make it worthwhile," he said.
Centene currently has Medicare Advantage plans in nine states, but is planning to buy rival Health Net this month and will likely expand following the merger.