Health insurer Centene Corp. is acquiring New York-based Fidelis Care for $3.75 billion, the companies announced late Tuesday.
Under the agreement, which is subject to regulatory approval, Fidelis Care will become Centene's New York subsidiary. The deal will help bolster Centene's government-sponsored healthcare and ACA marketplace business lines.
The companies expect to close the deal in the first quarter of 2018.
"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 CEO Michael Neidorff said in a statement.
Fidelis Care is a not-for-profit plan serving more than 1.6 million members as of June 30. It serves about 1.3 million members in state-sponsored programs, including Medicaid, and covers 224,000 members through New York's health insurance exchange. Its total revenue was $4.8 billion for the six months ended June 30.
Centene serves about 12.2 million members. Its Medicaid membership totaled 7.2 million as of June 30, and its exchange membership totaled almost 1.1 million. Centene will expand its footprint in the ACA exchanges in 2018, even as other health insurers retreat because of financial losses and an uncertain regulatory environment.
After the transaction is complete, Fidelis Care CEO Rev. Patrick J. Frawley will continue to head up the plan as CEO of the subsidiary. Fidelis Care will keep its name and its 4,000 employees will remain with the company, according to the announcement.
"We believe that aligning with Centene will provide compelling benefits for our members, with greater tools and resources to promote better health outcomes and enhance care and disease management," Frawley said in the statement.