WellCare Health Plans said Medicare Advantage and other lines of business continue to grow as the company’s sale to Centene wends its way through the regulatory process.
In particular, WellCare’s Medicare health plan business that Centene wants to grow was up 19,000 members or 3.5% to about 563,000 as of Sept. 30, the company said Wednesday in its third-quarter earnings report. WellCare is expanding Medicare Advantage into 87 new counties for 2020, company chief executive officer Ken Burdick disclosed Wednesday morning on a call to discuss earnings.
Medicare Advantage is the hottest business in health insurance these days as insurers from Anthem and the Aetna unit of CVS Health to UnitedHealth Group expand into new regions selling such plans. These insurers are taking advantage of new rules that allow them to provide more supplement benefits to seniors.
WellCare’s third-quarter net income jumped more than 70% to $241 million, or $4.74 per share, compared to $130.6 million, or $2.70 per share in the third quarter of last year.
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Revenues, meanwhile, rose more than 40% to $7.1 billion. That included a 16% increase to $1.8 billion in revenue from Medicare health plans in the third quarter.
Centene, which is buying WellCare for more than $15 billion, is perhaps best known for administering Medicaid benefits for poor Americans and selling subsidized individual coverage under the Affordable Care Act in 20 states.
Centene last week said the approval process for its acquisition of WellCare Health Plans “is ahead of schedule” with just two states and the U.S. Justice Department needed to approve the merger.
Centene has said its proposed acquisition of WellCare will give the combined company 22 million members in all 50 states and combined revenue approaching $100 billion.
Centene’s WellCare transaction would put the combined company in all 50 states, creating a larger player in the business of administering Medicare Advantage. Centene already sells Medicaid benefits in contracts with many states and is the largest provider of individual coverage under the Affordable Care Act, offering subsidized Obamacare in 20 states. Centene is expanding in 10 of these states for 2020.
WellCare’s Medicaid health benefits for poor Americans also saw growth in the third quarter. Medicaid health plan enrollment rose nearly 5%, or 181,000 members to 4.1 million as of the third quarter’s end. But revenue growth in the Medicaid health plan business was even more robust, rising more than 50% to $4.9 billion, WellCare said.