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Centene Becomes a Behavioral Health Giant

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What You Need to Know

  • Centene is moving from being a Medicaid plan provider to reaching tens of millions of commercial health coverage users.
  • Anthem has acquired a managed Medicaid long-term care plan in New York state.
  • Molina has acquired a managed Medicaid plan business in Texas from Cigna.

Centene Corp. has completed its $2.2 billion acquisition of Magellan Health — and changed who it is.

The Clayton, Missouri-based company had been focusing mainly on managing Medicaid plans for low-income people.

Centene then branched out by building a significant presence on the Affordable Care Act public exchange system; acquiring Health Net, a company with large commercial health insurance operations in California, in 2016; and acquiring WellCare Health Plans, a Medicare plans issuer, in January 2020.

Magellan manages behavioral health care for 41 million people, in all types of health plans. By acquiring Magellan, Centene has relationships with tens of millions of people in large- and small-group employer health plans.

Centene is also now responsible for managing medical pharmacy costs and specialty care costs for millions of enrollees with individual or group major medical insurance.

Michael Neidorff, Centene’s chairman and CEO, who is planning to retire at the end of the year, said in a comment included in the closing announcement, that the company wants to find new ways to improve behavioral and specialty health care, especially for people with costly health problems.

“Magellan will expand Centene’s reach to provide increased access to behavioral health care for our members at a time when so many Americans are struggling with mental or behavioral health issues,” Neidorff said.

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Magellan will continue to operate as a separate business, and Ken Fasola, who has been Magellan’s CEO, will continue to run the business, Centene said.

Magellan is based in Scottsdale, Arizona.

Molina Healthcare has also closed on an acquisition, and Anthem has announced a new acquisition.

Molina and Cigna

Molina Healthcare — a health insurer based in Long Beach, California — has completed the previously announced acquisition of Cigna Medicaid contracts in Texas. The Cigna Medicaid plans in Texas manage coverage for 50,000 people.

Anthem and Integra

Anthem has greed to acquire Integra Managed Care, a Lake Success, New York-based company that manages a managed long-term care plan for adults with disabilities and long-term care needs, from Personal Touch Holding Corp.

Anthem is based in Indianapolis. It provides or manages health health coverage for 45 million people.

Pictured: Michael Neidorff (Photo: Scott Eells/Bloomberg)