Centene plans Medicare Advantage joint venture with Ascension

In an announcement on Monday, both companies stressed their ability to serve low-income seniors. (Getty/FS-Stock)

Centene and Ascension plan to launch a Medicare Advantage (MA) plan together starting in 2020, the companies announced Monday.

The two healthcare giants signed a letter of intent to explore a joint venture, according to the announcement. The plan would become Centene and Ascension’s preferred model in several geographic markets, though the companies did not specify which markets they plan to target.

In a statement, Ascension President and CEO Anthony Tersigni said the venture “aligns with our mission of serving those who are vulnerable and struggling the most, which all too often includes our seniors.”

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Similarly, Centene CEO and Chairman Michael Neidorff said Centene and Ascension “share a commitment of serving the underserved and intend to leverage the best capabilities of both organizations to provide high quality, affordable healthcare to support the needs of low-income seniors.”

RELATED: Ascension, Presence Health combine to form nation’s largest Catholic system

Based in St. Louis, Ascension is the largest Catholic healthcare system in the country, with sites of care in 22 states and the District of Columbia. In addition to traditional healthcare, Ascension provides social services, senior services, counseling and support groups, which may align well with supplemental MA plan benefits.

Centene currently offers its MA plan, Allwell, in 20 states nationwide. These states include New York, where it began offering plans after completing its acquisition of Fidelis Care last month.  

Its enrollment in all Medicare plans rose 16,000 between Q2 2017 and Q2 2018, and the insurer has said it wants to continue expanding its reach in MA. 

RELATED: Centene revenues up 19% following Fidelis purchase

In last week's earnings call, Neidorff hinted at a pending deal aimed at increasing the company's inorganic Medicare growth, but he declined to discuss details "from a competitive standpoint."

Recent acquisitions could serve the insurer well in its joint venture with Ascension. Earlier this year, Centene acquired Community Medical Group, a primary care provider that serves Medicaid, Marketplace and MA patients in Miami-Dade County, Florida. Miami-Dade County has the second-highest MA enrollment rate in the country, with 65% of Medicare-eligible individuals enrolled in an MA plan. (It ranks behind Red Lake County, Minnesota, and is tied with Meeker County, Minnesota; Monroe County, New York; and Todd County, Minnesota.)

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Centene Corporation posted $95 million in profit for the third quarter of 2019, which skyrocketed from $19 million in the third quarter of 2018.