Centene, WellCare deal raises antitrust questions

Centene Corp.'s proposed $17.3 billion acquisition of WellCare Health Plans would make Centene the third-largest publicly traded managed care provider, according to S&P Global Market Intelligence's analysis of membership data.

If the deal closes, the combined entity would be the top Medicaid provider in the nation, with 12.3 million members. Jefferies analyst David Windley told S&P the companies do have some material overlap in Florida, Georgia, Illinois and Missouri. A separate analyst on the conference call said the deal could raise some antitrust concerns, as Centene already controls a large share of the Medicaid market in several states.

"Centene has been more acquisitive and slowly edged itself toward the top five," Mr. Windley told S&P. "This deal kind of makes it so you can't think of them as one of the small guys anymore." He added the merger could help Centene "leapfrog" over Humana when it comes to revenue.

In an interview with Bloomberg Law, Centene CEO Michael Neidorff said the insurer will have to divest some plans in two states where competition is limited in the Medicaid market.

"There are two states, Nebraska and Missouri, where there's three plans, and WellCare's one, we're one," Mr. Neidorff said April 4. "We know one of the plans is going to have to be divested."

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