Health insurer Centene announced on Sept. 12 it had entered into a definitive agreement to buy Fidelis Care, the leading Medicaid managed care insurer in New York, for $3.75 billion.
"Centene's and Fidelis Care's missions are fully aligned in terms of promoting health through high quality, accessible care and services for all and advocating for health policy that accords true dignity and respect for all people, especially the underserved,” Centene Chairman, President and CEO Michael Neidorff, said in a statement. “Through this transaction we can further enhance the well-being of Fidelis Care's members and continue to build linkages and systems for the coordination of care and services among healthcare, behavioral and social services while doing so at an appropriate level of cost.”
The not-for-profit Fidelis currently serves 1.6 million members and recorded revenue of $4.8 billion through the first six months of 2017. It’s the leading insurer on New York’s Affordable Care Act exchange and offers Medicare Advantage plans.
“We look forward to working closely with Centene's management and to take advantage of their comprehensive, state of the art technology and medical management, wellness and care management systems," said Rev. Patrick J. Frawley, CEO of Fidelis Care.
For Centene, the purchase would continue its expansion into ACA markets—with its participation moving in the opposite direction of other national insurers—as well as give it a foothold in the four states with the largest managed care membership: California, Florida, New York and Texas.
Centene said it will fund the purchase with $2.3 billion of new equity “including share consideration” and $1.6 billion of new long-term debt. It expects the sale to close in the first quarter of 2018.