Kentucky awarded new five-year Medicaid managed care contracts to Aetna, Humana, Molina, UnitedHealthcare and WellCare to start next July.
But the state did not renew the contracts for Anthem or Passport Health, the latter of which is being acquired by Evolent Health.
Kentucky said on Wednesday that the five payers selected will serve the state’s approximately 1.3 million Medicaid beneficiaries starting on July 1, when the current contracts expire. The current cost of the contracts is approximately $8 billion a year, according to the Louisville Courier-Journal.
The state added that WellCare was awarded a contract to serve all children in the state’s foster care system.
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Molina and UnitedHealthcare will be new entrants into the managed care business in Kentucky, replacing contracts held by Anthem and Passport. WellCare, Aetna and Humana also hold current managed care contracts.
The news was distressing to Evolent Health, whose stock has declined by 33% on Wednesday.
Evolent Health announced plans to purchase 70% of Passport back in May. Now Passport is in trouble as the managed care business is the lion’s share of its revenue.
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Passport said in a release Wednesday that the acquisition by Evolent is still expected to close by the end of the year.
The nonprofit insurer has also run the state’s managed care business for more than 20 years, until the state decided to expand to let other companies bid for the business.
Passport said that it was “deeply disappointed” by the decision.
“We intend to protest the state’s decision,” said CEO Scott Bowers in a release.