WellCare Health Plans, Inc. (NYSE: WCG) is moving into the Arizona Medicare and Medicaid markets. Care1st Health Plan, an affiliate of Blue Shield of California, agreed to sell its subsidiaries Care1st Health Plan Arizona, Inc. and ONECare by Care1st Health Plan of Arizona, Inc. (together, Care1st Arizona), managed care companies that provide Medicaid and Medicare benefits to approximately 114,ooo beneficiaries in Maricopa and Pima counties, Arizona’s largest geographic service areas.
The $157.5 million purchase price is inclusive of statutory capital and subject to certain adjustments, and will be funded with available cash on hand.
WellCare provides government-sponsored managed care services, primarily through Medicaid, Medicare Advantage and Medicare Prescription Drug Plans.
Blue Shield of California acquired Care1st Health Plan in December 2014 for an undisclosed price. At the time, Care1st was a physician-founded managed care company with 473,000 Medicaid members, 46,000 Medicare members and 5,300 members dually eligible for both Medicaid and Medicare in California, Arizona and Texas.
The transaction enabled Blue Shield to offer Medicaid coverage for the first time, and extended its coverage of the Medicare population.