WellCare Joins In Health Industry Merger Trend With $2.5B Deal To Acquire Meridian
The move is just the latest in an industry seeking to survive through consolidation and deals with other insurers, ambulatory care providers and pharmacy benefit managers.
Managed-care company WellCare Health Plans Inc. has reached a deal to buy Meridian, which operates a pharmacy-benefit manager and health plans in Illinois and Michigan, for $2.5 billion in cash. The transaction allows Tampa, Fla.-based WellCare to expand its government-sponsored health plans by adding Michigan, where Meridian has the No. 1 Medicaid market position, and grow its Medicaid business in Illinois, the companies said Tuesday. The deal is expected to close by year鈥檚 end. (Al-Muslim, 5/29)
The all-cash deal for Meridian Health Plan of Michigan Inc. and Meridian Health Plan of Illinois Inc. will give Tampa-based WellCare about 1.07 million new customers, WellCare said in a statement. It will also gain MeridianRx, Meridian鈥檚 drug benefits business. Medicaid, which was expanded under the 2010 Affordable Care Act, has been a growth area for health insurers. WellCare said the new members will make it the top Medicaid player in six states, up from four. (Armstrong, 5/29)
The deal "will grow and diversify our Medicaid and Medicare Advantage businesses" and "add new and enhance existing capabilities," WellCare CEO Kenneth Burdick said on Tuesday.
WellCare's announcement comes amid rampant consolidation in the health insurance industry, as health plans pair up with other insurers, ambulatory care providers and PBMs. Anthem last week bought Aspire Health, a Nashville-based palliative care company. Humana has struck deals to buy stakes in home health services provider Kindred Healthcare and hospice operator Curo Health in recent months. (Livingston, 5/29)
