Membership in WellCare’s medical plans increased significantly in the third quarter of 2018, and with more members came higher earnings.
But the company is “far from satisfied” with these gains, hoping to continue improving across a wide range of metrics in the fourth quarter and beyond, said CEO Ken Burdick on Tuesday's earnings call.
Medicaid plans brought in a total of $3.2 billion, an 18.4% increase from the third quarter of 2017. Revenue for Medicare health plans reached $1.6 billion, or 7.9% more than in the third quarter of 2017.
WellCare attributed this growth in large part to its acquisition of Meridian, which it completed in September. The move increased its Medicare and Medicaid enrollment by 24,000 and 1.1 million members, respectively. The insurer now covers nearly 4 million Medicaid beneficiaries.
Net income dropped to $130.6 million for the quarter, down from $172 million in the same quarter last year.
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The insurer cited its two new Medicaid contracts—one in its home state of Florida and one in Arizona—as sources of revenue and membership as well.
WellCare has focused on delivering value and quality—its Medicare star ratings and Medicaid NCQA ratings are up—by engaging with other organizations, Burdick said. For instance, it is working closely with local agencies in Florida and Arizona on the new Medicaid contracts, and with provider organizations in several states to expand its networks.
Going forward, WellCare will continue to seek “innovative partnerships and value-based arrangements,” Burdick said.
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It’s also working to improve its internal operations by leveraging best practices in information management and technology, he added.
The company’s acquisition of Aetna’s Part D business also loomed over the call. Burdick said WellCare was “delighted” to provide a solution for the Department of Justice.
WellCare lost 85,000 Part D members between the third quarter of 2017 and the third quarter of 2018, a 7.4% drop. Revenue from Part D plans fell by 9.7%, though it still made $182.3 million from those plans this past quarter. In a press release, the company attributed these losses “primarily” to its bid positioning.