WellCare Health Plans grew revenue and profit in the fourth quarter of 2018 thanks in large part to its $2.5 billion acquisition of Meridian Health Plan.
The Tampa, Fla.-based insurer reported net income of $55.9 million on revenue of $6.1 billion in the fourth quarter of 2018. That compares with net income of $60.7 million on revenue of $4.3 billion during the same period in 2017. WellCare said organic growth and the reinstatement of the health insurer fee in 2018 also drove the increase in revenue.
Company CEO Ken Burdick said Tuesday that "2018 was a very good year for WellCare. We exited the year with continued momentum and line of sight to multiple earnings levers ahead of us. While we focus on the execution of our near-term commitments, we are also seeking out additional opportunities to drive further growth."
WellCare began a new, expanded Medicaid contract in Florida in December 2018, which will increase its Medicaid revenue by about $1.9 billion, Burdick said. This week, the insurer also won a statewide contract to serve North Carolina Medicaid beneficiaries under the state's new managed Medicaid program.
WellCare's Medicaid rolls ballooned to 3.9 million at the end of the year, an increase of 44% over 2017 thanks in large part to the insurer's $2.5 billion acquisition of Meridian Health Plan that closed in September. That membership growth helped send Medicaid premium revenue 53.4% higher to $4.1 billion in the three months ended Dec. 31, compared with the same period a year ago. Organic membership growth in Illinois and Arizona also helped boost premium revenue.
Membership in Medicare plans, meanwhile, was also helped by the Meridian deal. WellCare covered 545,000 Medicare Advantage seniors, an increase of 9.9% year over year. Its Medicare premium revenue grew 12.9% to $1.6 billion during the fourth quarter over the year-ago quarter.
WellCare's enrollment in prescription drug plans fell by 8.2% to about 1.1 million in the fourth quarter. But the insurer recently closed its acquisition of Aetna's prescription drug plan business and will start seeing the benefits of that deal come January 2020.
For the full year 2018, WellCare reported revenue of $20.4 billion, up 20%, and net income of $439.8 billion, up 17.7% year over year.
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