Insurance departments in 17 states gave the thumbs-up to Centene Corporation and WellCare Health Plans’ announced merger.
Centene revealed Thursday that the deal had cleared that crucial hurdle on the way to a planned closure in the first half of 2020.
The $17.3 billion merger was first announced in March, and if it’s finalized the combined insurer would be one of the country’s largest sponsors of government insurance.
The Centene-WellCare merger was OKed by officials in Alabama, Arkansas, Florida, Kansas, Kentucky, Maine, Michigan, Mississippi, Missouri, Nebraska, New Hampshire, North Carolina, Oklahoma, South Carolina, Tennessee, Vermont and Washington.
The Florida approval is notable, according to the announcement, as the state is the primary regulator of WellCare and its subsidiaries.
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“With these approvals, we are building momentum as we move forward with the regulatory approvals process,” Michael Neidorff, CEO of Centene, said in the announcement.
“We look forward to continuing to demonstrate to the remaining state insurance regulators how our combination will enable us to improve quality for recipients, deliver fair compensation for providers and create savings for states,” Neidorff said.
The deal passed another key milestone in June, when the shareholders of both insurance companies signed off on the merger. Officials at Centene feel confident that the deal is pacing ahead of schedule, they said on the insurers Q2 earnings call, and they think the merger could close earlier than expected next year.
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That shareholder vote shut down concerns that investors were planning an alternate deal internally and were hoping to push Centene to sell to Humana. Humana denied those rumors.
Providers have warned that the deal could lead to far less competition in both Medicaid managed care and Medicare Advantage. The American Hospital Association urged the Department of Justice to “fully investigate” the merger.
“DOJ’s careful review of transactions in the health insurance industry is warranted,” AHA General Counsel Melinda Reid Hatton wrote in a letter to the agency. “Transactions such as these can adversely impact the quality of care provided to this vulnerable population.”