American health insurer Centene has agreed to sell its Illinois subsidiary, IlliniCare Health Plan, to CVS Health to aid its planned merger with WellCare Health Plans.
Financial terms of the deal were not disclosed.
After the acquisition, Centene will retain Medicare-Medicaid Alignment Initiative (MMAI) business and YouthCare foster care contract slated to start next February.
The sale does not impact Centene’s Illinois-based Ambetter business.
Centene chairman, president and CEO Michael Neidorff said: “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.
“Our employees in Illinois have done an exceptional job serving our communities in the state. We are pleased to enter this agreement with CVS Health, under which these employees can continue helping members achieve better health outcomes while delivering benefits to providers. We will work closely with CVS Health to ensure a smooth transition of this business for members, employees and providers.”
The transaction awaits regulatory approvals from the state and US federal antitrust clearance along with the completion of the Centene – WellCare deal.
The Centene – WellCare deal is anticipated to close by the first half of next year.
Last month, Centene received approval from the insurance departments of Arizona, Georgia, Connecticut, Ohio and Texas regarding the proposed $17.3bn takeover of WellCare Health Plans.
The agreement, which was signed in March this year, has now secured regulatory approvals in 24 states in the country.