WellCare Health Plans has acquired Advicare Corp., a Medicaid managed-care company based in South Carolina, marking WellCare's first acquisition in almost two years.
The deal comes just two weeks after executives at WellCare, a for-profit insurer headquartered in Tampa, Fla., made it clear they were actively hunting for health plans. WellCare has about $1.25 billion to spend on transactions.
WellCare's purchase of Advicare will add 32,500 South Carolina Medicaid beneficiaries, giving WellCare more than 92,000 Medicaid members in the state that has been at the center of the Republican and Democratic presidential campaigns for the past two weeks.
The deal, expected to close in the second quarter of this year, could add up to $120 million in annual revenue, Chris Rigg, an analyst at Susquehanna Financial Group, wrote last week. WellCare's revenue in 2015 totaled $13.9 billion.
Medicaid represents about two-thirds of WellCare's revenue. Medicare Advantage and Part D prescription drug plans make up the rest, and the Medicare line of business received a dose of good news last week from the CMS.
Medicare Advantage rates are increasing next year, and the CMS proposed instituting new policies that would boost payments to health plans that enroll a lot of patients eligible for both Medicare and Medicaid coverage, known as dual-eligibles. Those patients, who often have many complex health conditions, are a target audience for WellCare.