CVS To Buy Centene’s Divested Illinois Medicare Advantage Plan

CVS Health will buy Medicaid and Medicare Advantage lines of business owned by Centene in Illinois as part of a divestiture needed by Centene to win approval of its WellCare Health Plans acquisition.

The divestiture by Centene of its IlliniCare Health Plan subsidiary is the latest effort by the health insurance companies to win over regulators to their merger. The merger has already “received approvals from insurance and health care departments from 26 states,” Centene said Monday. 

“The transaction entails the sale of Centene's Medicaid and Medicare Advantage lines of business in Illinois,” Centene said Monday in a statement announcing the divestiture. “Centene will retain IlliniCare's Medicare-Medicaid Alignment Initiative ("MMAI") business and IlliniCare's statewide YouthCare foster care contract, set to commence in February 2020. Centene's Ambetter business in Illinois is not affected.”

Financial terms of the IlliniCare transaction weren’t disclosed Monday.

Centene, which announced plans to buy WellCare for more than $15 billion earlier this year, said the merger should be completed in the first half of 2020. "We are continuing to make progress towards completing our transaction with WellCare and the divestiture of our IlliniCare Health plan is the next step in that process," Centene chairman and chief executive Michael Neidorff said.

The news is good for CVS, which last year bought the health insurance giant Aetna, because it is amid a fierce battle to grow its Medicare Advantage business with rivals UnitedHealth Group, Humana and others. "Expanding our Medicaid and Medicare Advantage presence in Illinois will allow us to serve more members with our proven holistic approach that addresses physical, behavioral and social determinants of care," Karen Lynch, executive vice president of CVS and president of Aetna said.