WellPoint, Indianapolis, agreed to acquire the 68,000-member Medicaid business of QualChoice Health Plan from University Hospitals Health System, Cleveland, for undisclosed terms. The deal is expected to close in the third quarter, pending regulatory approval. As part of the agreement, University Hospitals will endorse WellPoint's Anthem Blue Cross and Blue Shield of Ohio as the insurer of choice for commercial customers of QualChoice, which University Hospitals is phasing out by year-end. Anthem currently covers 2.9 million commercial and Medicare members in Ohio, but it is new to the Medicaid market in the state. Ohio is seeking to move to mandatory managed care for Medicaid beneficiaries by year-end.
Separately, WellPoint reported first-quarter net income of $731.8 million, up 20% from $611.7 million a year earlier. Revenue rose 26% to $13.61 billion. WellPoint's enrollment rose 20% to 34.2 million members, driven largely by its acquisition of 4.8 million-member WellChoice, New York, in December. WellPoint projected full-year earnings of $4.63 per share, up 18% from 2005. The company said the QualChoice acquisition would not have a material effect on 2006 earnings. -- by Laura B. Benko
