WellCare Soars, Buys Another Co.
WellCare Health Plans, with its stock already up more than 40 percent this year, announced it is buying another company on Thursday. The Tampa company stands to grow in Florida by as much as $1 billion in the Florida Medicaid conversion to managed care, to be announced Sept. 16.
About 1.7 million Medicaid enrollees will be given a choice of managed-care plans, and if WellCare maintains its current 25 percent market share, it would gain $1.1 billion in new revenue, says Stifel analyst Tom Carroll in a note to investors.
If WellCare gets only 19 percent of the new enrollees, it would still gain about $600 million, Carroll wrote.
Thursday, the company said it will acquire Windsor Health Group Inc. in Atlanta, part of global giant Munich Re. The purchase price was not disclosed, but Carroll estimated it at $250 to $300 million. That reflects recent losses, despite premium revenue for next year forecast at more than $800 million.
Carroll noted that WellCare’s recent purchase of several health plans is part of a national trend for insurers in the Medicare Advantage market to consolidate, ahead of price constraints to come over the next two years.
Through subsidiaries, Windsor has a variety of Medicare products:
- Medicare Advantage plans in Mississippi, Tennessee, Arkansas and South Carolina, with enrollment of 59,000.
- prescription drug plans with 164,000 enrolled.
- Medicare Supplement insurance policies with about 52,000 members in 40 states.
WellCare contracts with state and federal agencies to provide managed-care services through Medicare and Medicaid. It had about 2.8 million members as of June 30, and has for years been Florida’s largest Medicaid HMO contractor.
The executives who left, as noted briefly at the bottom of a company press release, were Dan Paquin, president of national health plans, and Walter Cooper, chief administrative officer. The company offered no explanation for the resignation of Paquin, who had been there less about 18 months. As for Cooper, WellCare noted that it was eliminating his job.
Some of those duties will go to Michael Polen, who was appointed to a newly created position, senior vice president for operations. Polen, who graduated from University of Florida and has an MBA from University of South Florida, has been with WellCare since 2005. His most recent role was vice president for corporate initiatives and strategy.