AHA asks DOJ to halt Centene-WellCare merger

The American Hospital Association urged the Trump administration on Wednesday to halt Centene’s $17.3 billion acquisition of WellCare Health Plans, claiming it will reduce competition in Medicaid managed-care and Medicare Advantage services.

Centene and WellCare are both major players in government-sponsored health plans, with both having a presence in Medicaid and on the Affordable Care Act’s exchanges. All told the two insurers would cover nearly 22 million people in Medicare, Medicaid and the exchanges.

The insurers’ markets overlap in several states, the AHA said in its letter, and they control over half of the Medicaid market in Florida, Georgia and Illinois.

“More and more states are moving towards a managed care model for their Medicaid programs in an attempt to control costs,” the lobbying group wrote. “Accordingly, DOJ must carefully scrutinize the transaction’s present and future competition between the parties to win state contracts.”

Centene CEO Michael Neidorff has previously commented that there are states where the insurers have three plans each, and acknowledged they will have to divest some plans.

While the companies have said the merger should clear antitrust reviews because Medicaid rates are set by the states, the AHA said that shouldn’t negate DOJ’s scrutiny of the deal.

“There is no service more important to American consumers than healthcare, and vigorous competition among health insurance companies is necessary to ensure that consumers receive high quality at affordable rates,” the AHA wrote.

WellCare is the fourth-largest provider of Medicaid managed-care plans and Centene has more than 2 million members on the exchanges.

Both companies reportedly competed to purchase Aetna’s Medicare Advantage business when that insurer attempted to merge with Humana, which the AHA said is a sign they want to “enroll the exact same consumers in the exact same plans.”

https://www.modernhealthcare.com/insurance/aha-asks-doj-halt-centene-wellcare-merger