Nationwide well being insurer Centene Corp. stated on Monday it would purchase Magellan Well being, creating what will likely be one of many nation’s largest behavioral well being platforms with 41 million members.
The St. Louis-based insurer pays $2.2 billion for the Phoenix-based managed-care firm.
The COVID-19 pandemic has created a “dramatic rise” within the variety of individuals looking for behavioral well being providers, in response to Centene CEO Michael Neidorff. Magellan’s providers will assist tackle Centene members’ behavioral and specialty well being wants, the corporate’s pharmaceutical choices and construct up Centene’s public plan enterprise—all areas the corporate has beforehand appeared to develop.
Final yr, Centene beefed up its Medicare Benefit and Medicaid managed-care choices by its $17 billion merger with WellCare Well being Plans, creating one of many largest suppliers of government-sponsored well being plans with roughly 22 million members. The Magellan acquisition will add one other 5.5 million members to this enterprise, Centene stated.
The acquisition can even develop Centene’s specialty drug administration providers and add 2 million pharmacy profit administration members and 16 million medical pharmacy members to its portfolio.
Neidorff stated these additions will in the end assist the payer present care to extra complicated—and sometimes extra pricey—affected person populations. The corporate famous that the sickest 5% of the inhabitants accounts for 50% of all healthcare spend. By specializing in rising its behavioral well being, specialty well being and pharmacy choices, Centene goals to decrease the price of this take care of its greater than 25 million members.
“This acquisition accelerates our diversification technique and enhances our capability to construct next-generation capabilities in our specialty care enterprise by leveraging our scale and investments in know-how,” Neidorff stated.
Magellan will function independently beneath the Centene umbrella. The acquisition is topic to regulatory approval, and Centene expects it to shut within the second quarter of 2021. In a separate announcement, Magellan introduced Monday that it closed the sale of its Full Care enterprise, a managed-care group serving members in six states, to Molina Healthcare for $820 million.