Hearing Scheduled for Sale of Health Net to Centene

Centene Corporation, a Fortune 500 company, intends to purchase the health plan after winning approval from state insurance commissioners.

Oregonians have a chance to share their opinions about the proposed sale of Health Net to Centene Corporation when Insurance Commissioner Laura Cali holds a public hearing. That hearing is scheduled for November 12 at 6 p.m. at University Place on the campus of Portland State University.

Cali has asked Centene officials to share their financial statements dating back five years and to tell her where the money is coming from to acquire Health Net.

Earlier, Centene, a Fortune 500 company, announced plans to purchase Health Net for $6.8 billion. At a shareholder meeting in Los Angeles last week, its stockholders voted to approve the merger agreement.

Of the 62,065,550 shares voting at the special meeting, more than 97 percent voted in favor of the proposal, representing more than 78 percent of Health Net’s total outstanding shares of common stock.

Centene is expected to create a leading diversified multi-national healthcare enterprise, once the deal is finalized, extending its offerings in government programs, including Medicare Advantage and programs offered through contracts with the U.S. Department of Defense and U.S. Department of Veterans Affairs, as well as the commercial exchanges.

Under the terms of the agreement, Health Net stockholders will receive 0.622 shares of Centene common stock and $28.25 in cash for each share of Health Net common stock. Upon completion of the transaction, Centene stockholders will own approximately 71 percent of the combined entity, with Health Net stockholders owning approximately 29 percent.

Centene has a reputation as a Medicaid managed care organization and has received approval from Cali to acquire Agate Resources, the parent company of Trillium Commnity Health Plan, which has over 100,000 Oregon Health Plan members in Lane County for $80 million.

With $22 billion in revenue and 4.4 million members in 23 states, Centene is one of three publicly traded stand-alone Medicaid-focused insurers. Its CEO and Chairman, Michael Neidorff earned $19.3 million in 2014, including $13.9 million of stock. Over the past 30 years, Centene has grown from a single health plan in Wisconsin to become a $10 billion Fortune 500 company trading on the New York Stock Exchange.

One unknown question about this pending transaction is whether Health Net – under Centene’s umbrella – will attempt to corral Medicaid members throughout Oregon and become, itself, a coordinated care organization in competition with the locally grown health plans. When reached for comment, Stephanie Tripp, spokeswoman for the Oregon Health Authority, which oversees such contracts, could not find any definitive information, telling The Lund Report that RFP and contract information on CCO.Oregon.gov and on the Transformation Center Website was “somewhat outdated.”

Centene has a reputation as a Medicaid managed care organization and just received approval from Cali to acquire Agate Resources, the parent company of Trillium Commnity Health Plan, which has over 100,000 Oregon Health Plan members in Lane County for $80 million.

With $22 billion in revenue and 4.4 million members in 23 states, Centene is one of three publicly traded stand-alone Medicaid-focused insurers. Its CEO and Chairman, Michael Neidorff earned $19.3 million in 2014, including $13.9 million of stock. Over the past 30 years, Centene has grown from a single health plan in Wisconsin to become a $10 billion Fortune 500 company trading on the New York Stock Exchange.

Diane can be reached at [email protected].  

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