Earlier this week, WellCare Health Plans Inc. (WCG) acquired the Medicare unit of Aetna Inc. (AET) named Missouri Care. WellCare had previously announced the deal in Jan 2013.
Subsequent to the deal WellCare will gain Missouri Care’s 100,000 MO HealthNet Medicaid program members and its provider network which includes more than 50 hospitals and 9500 physicians.
WellCare’s Missouri operations serve around 3000 Medicare Advantage members and 13,000 Medicare Prescription Drug Plan members. The acquisition of Missouri Care will boost is existing Medicare Advantage and Prescription Drug Plan business in the state.
As per the deal, the only change that the plan members will face is the receipt of a new ID card in their respective mails along with a new phone number to avail a 24–hour nurse advice line. The hospitals and physicians will remain registered under the provider network and continue to use the claims submission process as before.
Aetna decided to hive the business to meet the conditions necessary to acquire the Missouri Medicaid Plan of Coventry Health Care Inc. (CVH). Coventry’s Missouri Medicaid plan serves around 250,000 members– higher than that of Missouri Care. Acquisition of Coventry’s subsidiary and retention of Missouri Care would have led Aetna to cross the permissible limits granted by the state’s Medicaid contracts. Thus, this step taken by Aetna helps to comply with the state’s rules which limit the number of members served by an insurer.
WellCare has engaged itself in a number of strategic acquisitions to fortify its Medicare business. In Jan 2013, WellCare concluded the purchase of some assets of Arcadian Health Plan Inc.'s Desert Canyon Community Care Medicare Advantage plans in Arizona from Humana Inc. (HUM).
WellCare currently carries a Zacks Rank #3 (Hold) while Aetna and Coventry carry a favorable Zacks Rank #2 (Buy).
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