Several well-timed Florida contracts are expected to add $1.5 billion in annual revenue for WellCare, executives told investors on Tuesday.
The Tampa-based insurer has secured two contracts in its home state over the last four months, including a recent sole-source contract to provide managed care services to 60,000 children with medically complex conditions through the state’s Children’s Medical Services Managed Care plan.
That’s on top of a five-year contract awarded to WellCare to provide managed medical assistance and long-term care coverage to beneficiaries in most of the state. That contract includes 75,000 beneficiaries in the state’s Serious Mental Illness program.
While those awards are still being finalized and navigating through the protest process, WellCare chief financial officer Drew Asher told investors the contracts will bring in an additional $1.5 billion in annual revenue once implemented. All told, the insurer’s Florida Medicaid business will bring in $4 billion annually.
“We've got a talented management team in Florida and some very good infrastructure supporting that business,” Asher said on Tuesday’s earnings call.
Medicaid plans are WellCare’s bread and butter, accounting for 2.8 million covered lives as of June 30, 2018. The insurer’s Medicaid business accounted for $2.9 billion in premium revenue in the second quarter, up 4.2% from the previous year. That accounts for almost two-thirds of the company’s $4.6 billion in total premium revenue during the second quarter.
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WellCare executives were quick to highlight the estimated $4.3 billion in revenue the company will realize this year once it closes its acquisition of Meridian Health Plans. The acquisition will add another 1.1 million Medicaid members in Michigan and Illinois.
CEO Kenneth Burdick told investors that deal received early termination of the federally mandated waiting period from the Federal Trade Commission in June.
“We are working closely with the Michigan and Illinois regulators through the approval process and expect the transaction to close in the next few months,” he said.