WellCare Health Plans CEO Ken Burdick plans to double the company’s revenue between 2017 and 2021, beginning with mergers and acquisitions.
On February 22, WellCare (NYSE: WCG) made a start on those plans, announcing its acquisition of certain assets of Advicare Corporation, a managed care organization that provides Medicaid benefits in South Carolina. As of February 1, 2016, it served approximately 32,500 Medicaid members in the state. Financial terms were not disclosed.
WellCare Health Plans provides managed care services for Medicare and Medicaid. As of December 31, 2015, it serves approximately 3.8 million members nationwide.
The February 19 announcement by the Centers for Medicare and Medicaid Services of a proposed 1.35% rate increase to private plans in 2017 boosted shares in WellCare, but also other managed Medicare providers, including Humana Inc. (NYSE: HUM), Centene Corp. (NYSE: CNC) and Molina Healthcare Inc. (NYSE: MOH). We expect to see more M&A action among these players, particularly after April 2016, when the CMS finalizes its rate proposal.