Wel­lCare en­ters Ari­zona Med­i­caid mar­ket with Care1st ac­qui­si­tion

Modern Healthcare - - REGIONAL NEWS - —Bob Her­man

Wel­lCare Health Plans has agreed to ac­quire Care1st Health Plan of Ari­zona for $157.5 mil­lion.

The deal, ex­pected to close in the first quar­ter of next year, marks Wel­lCare’s en­trance into the Ari­zona Med­i­caid man­aged-care mar­ket. Wel­lCare had 2.43 mil­lion Med­i­caid mem­bers as of June 30; more than half of that to­tal resided in Florida and Ge­or­gia, two states that did not ex­pand Med­i­caid un­der the Af­ford­able Care Act. Ari­zona is one of 31 states that has ex­panded Med­i­caid eli­gi­bil­ity to more low­in­come peo­ple.

Care1st Ari­zona pro­vides Med­i­caid cov­er­age to 112,000 peo­ple in the state’s two largest coun­ties and also has a small Medi­care Ad­van­tage spe-

cial needs plan that cov­ers 2,000 peo­ple.

Wel­lCare ex­ec­u­tives in Fe­bru­ary said the com­pany had $1.25 bil­lion in cash re­serves to spend on trans­ac­tions. Care1st Ari­zona is ex­pected to add about $400 mil­lion of premium rev­enue to Wel­lCare, ac­cord­ing to Wall Street pro­jec­tions. Wel­lCare, which also sells Medi­care Ad­van­tage and Medi­care Part D pre­scrip­tion drug plans, had rev­enue of $3.6 bil­lion in the first half of this year.

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