Healthcare insurance company Centene announced that it will offload its Illinois businesses to CVS Health. This will move the insurer a step closer to completing the $15.27 billion takeover of WellCare Health Plans.
Centene said that it would sell its Medicaid and Medicare Advantage business lines in IlliniCare Health Plan. The parties do not disclose the terms of the transaction.
Illinois state regulators must approve the deal first and customary closing conditions also should be satisfied. The divestment is conditioned by the closing of the WellCare merger as well.
“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,” said in a statement Centene CEO Michael Neidorff.
The Illinicare plans serve approximately 1.5 million patients and include older adults who are eligible for coverage under Medicaid and Medicare.
Following closure, Centene will retain the Medicare-Medicaid Alignment Initiative of IlliniCare along a foster care contract.
In September, WellCare divested two units because they overlapped with Centene in Missouri and Nebraska. The insurer said expects tio close of the transaction by the first half of next year.
The two companies added a month later that the combination might close earlier than expected. Centene said the regulatory approval process “is ahead of schedule.” The buyer noted that only the federal government and two states are yet to clear the deal.
The combined entity will have presence in all 50 states. The new company entity will also administer Medicaid benefits for poor Americans along with its private Medicare Advantage coverage.