Consolidation has been a major theme in the health insurance industry. And it looks like we could see more of it next year. Pending regulatory approvals, a new deal will allow WellCare to expand its business in Arizona.
WellCare Health Plans Inc. recently announced that it plans to buy two subsidiaries of Care1st Health Plan, an affiliate of Blue Shield of California. The subsidiaries, Care1st Health Plan Arizona and ONECare by Care1st Health Plan of Arizona (collectively known as “Care1st Arizona”), are managed care companies that provide Medicaid and Medicare benefits in Maricopa and Pima counties.
The $157.5 million deal will enable WellCare to expand its footprint in Arizona’s largest geographic services areas. Currently, the insurer does not offer Medicare or Medicaid plans in the state. However, it does a have small presence there due to a prescription drug plan it operates nationwide.
In order for the deal to go through, it must get the approvals it needs and meet other possible closing conditions. The deal is expected to close in the first quarter of 2017. WellCare believes the transaction will add to earnings in the first year after the deal closes.
Care1st Arizona has provided government-sponsored programs in the state for over 13 years. It serves approximately 114,000 beneficiaries. WellCare, based in Tampa, Florida, serves approximately 3.8 million members across the country.