Joe, I thought about this a little more and there is a small piece missing. The WSJ article mentioned a phrase that the alleged fraud occurred, "over the course of five years." Well, that reinsurance subsidiary wasn't setup until 2005, which is less than five years ago.
So, I still like your post and that article's facts. However, it may not be the silver bullet....
You know, Joe, I saw this article brought up before. But after that Wall Street Journal article that specifically mentioned the $35M number, it takes on a whole different meaning. It is possible that you nailed it here!
http://www.ctnewsjunkie.com/upload/2007/04/husky_provider_hiding_profits/WellCareTrib.pdf "The April 11 Tribune story quoted three Wall Street analysts who said WellCare's Florida HMOs sent far more money than necessary to the unregulated subsidiary, Comprehensive Reinsurance Ltd. The WellCare HMOs sent $73 million and recovered $38 million, a difference of $35 million. Ryan noted that the analysts erred by lumping the Medicaid and Medicare premiums together. Only $19 million of the shift was for Medicaid because the risk for Medicare beneficiaries was much greater. After end-of-year claims came in, the claim recoveries for Medicaid patients equaled $19 million, he said. The Medicare premiums and recoveries also matched up, he said. The confusion may have arisen because the reinsurer was created in late 2005. "It's a new entity," he said."