TAMPA — WellCare Health Plans on Tuesday reported strong financial performance during 2018, a year in which it positioned itself for future growth with two transformative acquisitions.
WellCare reported net income for the year of nearly $440 million as its total revenue grew by nearly 20 percent to $20.4 billion, thanks in large part to the new members and business brought in through its purchase of the Meridian Health Plans in the Midwest.
The Fortune 200 company announced 2018 earnings of $11.03 per share, up from $8.52 per share in 2017. It projected earnings for the coming year in the range of $13.25 to $13.50 per share.
“We enter 2019 with momentum,” WellCare chief executive officer Ken Burdick told analysts on a conference call.
BACKGROUND: WellCare's strategic plan for growth
From its Tampa headquarters, WellCare manages health care for about 5.5 million patients with Medicaid, Medicare Advantage or Medicare prescription drug plans. More than 3.9 million of those patients are covered by Medicaid, the federal health plan for the poor, and most live in eight states: Illinois, Florida, Michigan, Georgia, Kentucky, Missouri, Arizona and New York. On Monday, North Carolina announced WellCare was one of four health plans selected to serve Medicaid patients there, too.
Last year, WellCare bought Meridian Health Plans for $2.5 billion. The acquisition brought in new members in Michigan and Illinois, plus Meridian’s in-house pharmacy benefits manager program. WellCare has said it expects the program to help lower costs, in part by integrating pharmacy services and medical care — though a proposed rule from the Trump administration could change the landscape for that kind of program.
Last week, the U.S. Department of Health and Human Services proposed to lower prescription drug costs and patient’s out-of-pocket costs by requiring that pharmacy benefits managers pass the discounts that they negotiate — and currently can keep — directly on to consumers.
“We’re completely on board with the notion that we need to find ways to lower the cost of prescription drugs to consumers,” Burdick said in response to a question about the proposed rule. Also, “we believe that more pricing transparency is in everyone’s best interest.”
That said, he added, “the devil now lies in the details in terms of how to best accomplish that.” So Burdick said WellCare executives are reviewing the proposal and expect to be “very engaged on multiple levels” with the Trump administration and Congress during a pending 60-day comment period on the new rule.
WellCare also picked up 2.2 million new members when it acquired Aetna’s Medicare Part D prescription drug plan. Terms of the transaction were not announced, but Aetna agreed to continue running and assume the risk for the program through the end of 2019. Consequently, WellCare does not expect to see any revenue from the Aetna deal until 2020.
WellCare has a total stock market value of more than $14 billion, the largest market capitalization of any publicly traded company based in the Tampa Bay area, though Tech Data is larger by revenue. WellCare’s stock was up more than 1 percent at $284.08 a share late Tuesday morning.
Contact Richard Danielson at [email protected] or (813) 226-3403. Follow @Danielson_Times