- The completion of the $2.5 billion Meridian deal comes amid a wave of consolidation among health insurance companies and PBMs.
- Meridian was privately-held with 1.1 million Medicaid, Medicare Advantage, dual-eligible and health insurance marketplace members as of the second quarter in Michigan, Illinois, Indiana and Ohio.
Wellcare Health Plans officially launched a new platform for multi-state growth, announcing Tuesday the close of its acquisition of Meridian Health Plans of Illinois and Michigan and the MeridianRx pharmacy benefit management company.
“This transaction grows and diversifies our Medicaid membership by nearly 40 percent, increases our Medicare Advantage presence in new markets, adds a proprietary PBM platform, and enhances WellCare’s integrated dual-eligible and Marketplace capabilities, positioning us for further growth within government-sponsored programs,” WellCare chief executive officer Ken Burdick said.
The completion of the $2.5 billion Meridian deal comes amid a wave of consolidation among health insurance companies and PBMs. Regulators are still working their way through the merger of CVS Health and Aetna as well as the proposed purchase by health insurer Cigna of the larger PBM, Express Scripts.
Wellcare’s deal was smaller than the Aetna-CVS and Express Scripts-Cigna transactions. Meridian was privately-held with 1.1 million Medicaid, Medicare Advantage, dual-eligible and health insurance marketplace members as of the second quarter in Michigan, Illinois, Indiana and Ohio.
Growth in Medicare and Medicaid managed care helped Wellcare’s profits more than double in the insurer’s second quarter to $151.6 million, or $3.35 per diluted share compared to $74.1 million, or $1.65 per diluted share in the second quarter of last year. Revenue rose nearly 8% to $4.6 billion.
Wellcare added more than 100,000 Medicaid members in the second quarter to end the quarter with 2.8 million in its Medicaid health plans. Meanwhile, Wellcare’s Medicare health plans ended the quarter with 510,000 members, a 5% increase from the second quarter of last year.
Wellcare is in a competitive battle with Aetna, Humana, UnitedHelath Group and the nation’s Blue Cross and Blue Shield plans to capture bigger shares of a fast-growing market of aging baby boomers turning 65 years old and becoming eligible for Medicare coverage. Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs
Date: September 6, 2018
Source: Forbes