- Centene has entered into an agreement to sell its Illinois health plan subsidiary, IlliniCare Health Plan, to CVS Health. The deal includes Centene's Medicaid and Medicare Advantage plans in the state.
- Centene will retain ownership of its Medicare-Medicaid Alignment Initiative and its statewide foster care contract. Its commercial Affordable Care Act marketplace business know as Ambetter will not be affected, the company said Monday.
- Terms of the deal were not disclosed, but it helps Centene move closer to finalizing its $17 billion acquisition of rival WellCare, which still faces a few more regulatory hurdles.
Initially, the multi-billion dollar Centene-WellCare deal raised antitrust concerns as the two had significant overlap in a number of states.
That includes Illinois, where four Medicaid managed care insurers operate statewide, including Blue Cross Blue Shield of Illinois, Centene's IlliniCare, WellCare's Meridian Health Plan and Molina, according to data with the state. There are two other plans, but they provide coverage only to Medicaid beneficiaries in Cook County.
There are about 2.1 million Medicaid managed care beneficiaries in Illinois, according to the state's data. Together, WellCare and Centene would have covered about 1.1 million members, or 53% of the total market.
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Centene has already divested its Medicaid managed care business in both Nebraska and Missouri. It sold those plans to Anthem.
Centene CEO Michael Neidorff said in a statement that as the company makes progress toward completing its transaction with WellCare, "the divestiture of our IlliniCare Health plan is the next step in that process."
Centene still expects the WellCare deal to close by the first half of next year. It has received approvals from 26 states but is still waiting on other federal and state regulatory nods.
The latest deal with CVS will also need to clear a few regulatory hurdles, including "antitrust clearance, receipt of Illinois state regulatory approvals and other customary closing conditions, as well as the closing of the Centene – WellCare transaction," the company said in Monday's release.
CVS Health owns Aetna, which has a small footprint in Illinois covering the dual-eligible population in five counties. The latest deal with Centene would greatly expand Aetna's footprint. In 2017, Aetna threatened to pull its Medicaid contracts over the state's budget crisis. Aetna was owed more than $698 million, according to Crain's. Aetna made good on its threat and exited the state's Medicaid managed care program after 2017.