WOODLAND HILLS—Health Net, an insurer based out of Woodland Hills, is set to be bought out by St. Louis based insurer Centene for $6.3 billion.
The merger follows a general overhaul occurring in the industry as a result of the Affordable Care Act, which has had a large impact on Medicaid. California is the country’s largest consumer of Medicaid, and the merger will allow Centene to tap into that market. Upon acquiring Health Net, Centene will be home to over 6 million Medicaid users.
The Centene merger is one of many in the recent years which has resulted in some worries of over consolidation resulting in possible monopolies that the Affordable Care Act may not have accounted for. Many of the newly merged companies have insisted that the public has nothing to worry about and say that they will use their size in a manner that is advantageous to their customers.
Since the Affordable Care Act, over 17 million previously uninsured Americans have gained insurance. Some worry that the governmental subsidies that accompany each new sign-up is putting a strain on an already deep national debt.
Centene is set to acquire Health Net, the deal is not yet finalized and still has the possibility to be usurped by other health insurer companies such as Anthem and UnitedHealth who are both looking to expand their networks via merger partners. Some analysts believe there is a possibility that one of the larger companies may attempt to acquire both Centene and Health Net in a blockbuster deal.
On Wall Street, stock in health care companies have been riding a roller coaster of ups and downs on each new piece of information on possible mergers. Health Net’s stock rose on the news of the Centene Merger while Centene’s own stock fell slightly.
Health Net is home to nearly 2,500 employees in Woodland Hills and it is unclear what will happen to these employees if a deal of any kind is reached.