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.
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.
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