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WellCare Reports Fourth Quarter And Year 2012 Results

Stocks in this article: WCG

Highlights of Other Recent Accomplishments

  • WellCare of Florida’s Medicaid and Medicare Advantage plans have been awarded an accreditation status of Commendable by the National Committee for Quality Assurance, or NCQA. In addition, as of January 2013, the Company has expanded its service area in the Florida Medicaid program to include all counties statewide.
  • Medicare Advantage membership increased 15% as of January 2013 compared with December 2012 as a result of the Company’s strong performance during the Medicare Annual Election period. For 2013, WellCare offers coordinated care Medicare Advantage plans in 204 counties across 14 states.
  • For 2013, WellCare launched a new enhanced Medicare Prescription Drug Plan (PDP) that offers members relatively low out-of-pocket costs and generic drug coverage in the coverage gap. More than 110,000 members chose this plan during the Medicare Annual Election Period, partially offsetting decreased membership assigned by the Centers for Medicare & Medicaid Services (CMS). As of January 2013, the Company estimates that over 75% of its PDP members had chosen WellCare as their prescription drug plan.
  • The Company concluded 2012 maintaining a disciplined approach to ensuring a competitive cost structure, reducing its adjusted administrative expense ratio for the full year by 120 basis points compared with 2011.
  • In January 2013, WellCare entered into an agreement to acquire Aetna’s Medicaid business in Missouri, which as of December 2012 served more than 100,000 MO HealthNet Medicaid program members. The Company anticipates that the transaction will close during the first half of 2013.
  • Over the past few months, the Company closed its previously announced acquisitions of Easy Choice Health Plan serving Medicare Advantage members in California, UnitedHealthcare’s Medicaid business in South Carolina, and certain assets of Humana’s Arcadian Health Plan’s Desert Canyon Community Care serving Medicare Advantage members in Arizona.

Company Operations for the Fourth Quarter of 2012

Adjusted net income per diluted share for the fourth quarter of 2012 decreased by $0.83 compared with 2011. The year-over-year decrease resulted mainly from increases in the Medicaid and Medicare Advantage segments’ medical benefits ratios (MBRs). These factors were partially offset by higher premium revenue in the Medicaid and Medicare Advantage segments, as well as decreases in the Company’s PDP segment MBR and adjusted administrative expense ratio.

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