Centene and WellCare complete giant health insurance merger

The big picture: A combined Centene and WellCare essentially functions as a branch of state and federal governments, because almost all of its $100 billion in annual revenue flows from taxpayer-funded health care programs.

• Two-thirds of revenue come from Medicaid, where Centene and WellCare serve as the insurance gatekeepers for low-income people in 30 states. The two companies always competed against each other in Medicaid bids.
• A growing portion of the combined company's revenue stems from private Medicare Advantage plans and Medicare prescription drug plans.
• WellCare doesn't sell any plans in the Affordable Care Act marketplaces, but Centene is the largest ACA insurer. Taxes subsidize a vast majority of those ACA premiums.

Between the lines: Centene had to sell some of its Medicaid and Medicare plans to alleviate competitive concerns raised by antitrust authorities, but those assets are just getting shifted to other dominant insurers.

• CVS Health bought Centene's Medicare and Medicaid plans in Illinois, and Anthem acquired WellCare's Medicare and Medicaid plans in Missouri and Nebraska.
• Health insurance is all about scale, and the biggest players are getting bigger.