WellCare has a lot to gain in Aetna-Humana merger

hands shaking in front of money

Aetna and Humana aren’t the only insurers rooting for federal officials to approve their merger. WellCare stands to double its Medicare Advantage membership if it capitalizes on Aetna’s divestures that are expected to be a part of the deal, according to Bloomberg Gadfly.

Aetna is preparing to divest MA assets in an effort to assuage anti-trust concerns, a plan it highlighted during a meeting with federal regulators last week. Both WellCare and Centene have placed competitive bids for Aetna’s planned divestitures, which cover 350,000 members.

That influx in MA market share would catapult WellCare past Cigna into the fifth-largest MA enrollment spot, according to Bloomberg. WellCare has an advantage over Centene in purchasing the divested plans since Centene is still carrying debt from the Health Net merger in March. WellCare also has the advantage of having a large market share in Florida, a state where Aetna and Humana have substantial MA overlap.

Prior to Friday’s meeting with Aetna and Humana, the Department of Justice said it had significant concerns about the merger, and experts were still skeptical that the divesture of MA plans would be enough to persuade the agency.

Antitrust regulators have expressed similar concerns about the Anthem-Cigna merger. If that deal falls through, Bloomberg notes, WellCare could draw interest as a potential acqusition target given its relatively small size.

- read the Bloomberg Gadfly article