WellCare becomes largest Medicaid provider in Michigan after Meridian acquisition
Michigan's largest Medicaid health-plan provider is now under new ownership.
WellCare Health Plans Inc. said Tuesday that it had completed on Saturday its $2.5 billion acquisition of Detroit-based Meridian Health Plan of Michigan Inc. as well as Meridian Health Plan of Illinois Inc. and MeridianRx, a pharmacy-benefit manager. Meridian now operates as a subsidiary of the publicly traded Tampa, Florida-based company.
The purchase grows WellCare's Medicaid membership by nearly 40 percent and introduces its services to new markets, including Michigan. It also now has the No. 1 Medicaid membership market share in Michigan and Illinois, increasing the number of states where it is the market leader from four to six.
The family-owned Meridian has 508,000 Medicaid members in Michigan. Meridian serves another 600,000 members in Illinois, Indiana and Ohio. The firm, based in downtown Detroit, said in May it expects to produce more than $4.3 billion in total revenue this year.
Grosse Pointe physician David Cotton and his wife, Shery, founded the company about a decade ago. Chris Curran, WellCare's vice president of corporate communication and brand marketing, said in an email that as of Sept. 1, the Cottons and their three sons who were company executives are no longer involved with the company's operations.
Curran said the company does "not anticipate significant associate changes as a result of the acquisition in Michigan." Meridian employes 2,100 people throughout the United States, 1,900 of which are in Michigan.
In 2015, Meridian partnered with Dan Gilbert's Bedrock LLC to buy the One Campus Martius building downtown. There are approximately 1,650 associates in or around Detroit today.
The biggest share of Meridian's business comes from Medicaid, which is the state and federal program that provides health coverage to low-income residents.
Meridian also has 27,000 enrollees in Medicare Advantage plans, which are becoming a major growth area for insurers. Medicare is the federal program that provides health coverage for people 65 and older or those with disabilities. Meridian also has 6,000 Michigan health insurance exchange members.
WellCare had 4.4 million Medicaid members as of June 30 this year. It reported revenue of $17 billion and income of $373.7 million in 2017.
Shares of the company's stock ended trading on Tuesday up 0.6 percent to $304.24.