HEALTH ACCESS: CA DMHC Approves Centene-Magellan Merger With Conditions

For immediate release: Thursday, December 30, 2021 For more information, contact:Anthony Wright, executive director, Health Access California, 916-870-4782 (cell) MERGER WATCH: CALIFORNIA DMHC APPROVES CENTENE-MAGELLAN MERGER WITH CONDITIONS AND CONSUMER PROTECTIONS California’s Department of Managed Health Care today approved a “diagonal” merger between the health plan Centene and Magellan, with several conditions on protecting patients from premium hikes as a results of the merger, improving access to care, especially regarding behavioral health, and making investments in the state’s health system. Health and consumer advocates raised concerns about the merger at a public hearing earlier this year, arguing for many of the conditions imposed.  This was the first merger reviewed under a new law, AB 595 (Wood) of 2018, to gives Department of Managed Health Care (DMHC) increased authority over health plan mergers, resulting in a public hearing and an independent health system impact analysis. SACRAMENTO, CA–Today, California’s Department of [...] Read More
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For immediate release: Thursday, December 30, 2021

For more information, contact:Anthony Wright, executive director, Health Access California, 916-870-4782 (cell)

MERGER WATCH: CALIFORNIA DMHC APPROVES CENTENE-MAGELLAN MERGER WITH CONDITIONS AND CONSUMER PROTECTIONS

California’s Department of Managed Health Care today approved a “diagonal” merger between the health plan Centene and Magellan, with several conditions on protecting patients from premium hikes as a results of the merger, improving access to care, especially regarding behavioral health, and making investments in the state’s health system.

  • Health and consumer advocates raised concerns about the merger at a public hearing earlier this year, arguing for many of the conditions imposed. 
  • This was the first merger reviewed under a new law, AB 595 (Wood) of 2018, to gives Department of Managed Health Care (DMHC) increased authority over health plan mergers, resulting in a public hearing and an independent health system impact analysis.

SACRAMENTO, CA–Today, California’s Department of Managed Health Care (DMHC) approved the merger of Centene and Magellan, with several conditions, including those advocated by consumer advocates.

“While not everything we advocated for, we appreciate the significant conditions placed on the Centene-Magellan merger to ensure patients are protected, from premium hikes as a result of this merger, to the other negative impacts of consolidation.” said Anthony Wright, executive director, Health Access California, the statewide consumer advocacy coalition. “We urge the Department of Managed Health Care to continue to be vigilant to ensure that the newly merged company complies with these conditions and California’s consumer protections, and ensures timely access to needed care, including behavioral health. ”

This was the first merger reviewed by the Department of Managed Health Care under AB 595 (Wood) of 2018. Health Access provided comment at a public hearing held on October 27, 2018, after the release of an independent health system impact analysis required by the new law.

“As the first merger under a new law regulating health plan mergers, this deal had to go through a public process and an independent health system impact analysis. These deals that reshape our health system are too important to be rubber stamped without public analysis and input, and we are glad that resulted in stronger conditions and consumer protections. Mergers like this have major impacts on the health care system we all rely on, including what choices consumers have and what we pay. While we appreciate the conditions placed on this merger, we continue to have watchful about the impact this deal will have on our health system, and concerned about the broader trend towards greater consolidation and higher health costs,” said Wright. “Ample academic evidence indicates that health care mergers, including those in California, often drive up health care costs but rarely improve health care quality.”

The California Legislature and Governor Brown enacted AB 595 by Assemblymember Wood in 2018 to institute stronger state oversight over health plan mergers and protects Californians from changes to the health market that may lead to higher health costs.

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