WellPoint Inc.’s purchase of Medicaid insurer Amerigroup Corp. AGP +0.27% catapults WellPoint deep into the chase for a huge—but potentially risky—new market covering people with costly health problems.
Known as dual-eligible patients, these are more than nine million Americans who qualify for both Medicaid and Medicare because of factors like age, disability and poverty. Rather than benefiting from the double coverage, they often wind up with poorly coordinated care from the systems’ different rules. The theory is that better management should lower their costs, estimated at about $300 billion today, by doing things like helping patients with chronic conditions avoid unnecessary hospital trips.
“The dual-eligible expansion opportunity is tremendous and was a driving force for this transaction,” said Angela Braly, WellPoint’s chief executive, on a conference call Monday. By purchasing Amerigroup, WellPoint becomes the biggest Medicaid insurer by adding a fast-growing company with contracts and connections in some key states.
The health-care overhaul law recently upheld by the Supreme Court created an office in the Centers for Medicare & Medicaid Services that aims to streamline the dual-eligible system. It gave grants to several states to help foster more coordinated efforts, and many other states are moving under their own power to do the same.
via WellPoint’s Amerigroup Deal Marks Big Push for ‘Dual’ Patients – WSJ.com.