WellCare enters ACA market space with its acquisition of Meridian Health Plans

WellCare Health Plans has decided to acquire Meridian Health Plans in Michigan and Illinois, including its pharmacy benefit manager, for $2.5 billion in cash. This deal leads to the re-entrance and may be an expansion into the ACA marketplace.

It also makes WellCare’s presence in government sponsored plans even more stronger. Meridian has around 1.1 million Medicaid members in Illinois and Michigan. This deal will push up WellCare’s membership by 26% to 5.4 million.

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In 2015 and 2016, WellCare sponsored a small number of exchange plans in two states before it could exit the exchanges. But, this acquisition of Meridian includes 6,000 ACA members in Michigan.

WellCare CEO Ken Burdick mentioned that insurer possess the capabilities to support these plans. He also said the company could expand that presence in other states.

This acquisition adds new capabilities in Meridian Rx, which is the company’s proprietary pharmacy benefit manager. This division has existed and has been operating for seven years, serving all Meridian’s membership as well as third parties.

Burdick said that this acquisition will give additional insight into changing pharmacy costs and bettering the quality by integrating pharmacy with medical care.

He added that this deal will give the company more transparency in the pharma ecosystem.