Centene sells Illinois health plan to CVS Health to bolster WellCare deal

Centene has agreed to sell its Medicare and Medicaid business in Illinois to CVS Health in a move that could help Centene get approval for its merger with WellCare. (Centene)

Centene has agreed to sell its Medicaid and Medicare Advantage business in Illinois to CVS Health in order to help its $15 billion merger with insurer WellCare.

The deal, announced Monday and financial terms of which were not disclosed, comes as CVS Health and its insurance division Aetna have made aggressive moves to woo more Medicare Advantage customers.

“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," said Karen Lynch, executive vice president of CVS Health and president of Aetna, in a statement.

Centene said the deal does not affect its Ambetter business, which offers health plans on the Affordable Care Act’s insurance exchange in Illinois. The deal also doesn’t touch Centene’s YouthCare foster care contract with Illinois, which is set to begin in February 2020.

The divestiture of Centene’s IlliniCare Health plan is “the next step” in the merger process with WellCare, said Centene President and CEO Michael Neidorff in a statement.

RELATED: SEC filings offer a look inside the Centene-WellCare merger talks

The deal with WellCare, announced back in March, is expected to close by the first half of 2020 and has gotten approval by 26 states so far.

CVS and WellCare have made previous moves to divest certain Medicaid plans in order to get federal and state approval for the merger. Back in September, WellCare sold its Missouri and Nebraska Medicaid plans to Anthem.

Centene has been bullish that the deal is going ahead of schedule. Neidorff told investors in October that the merger, which would create one of the biggest providers of government plans, could close earlier than the first half of 2020.