Tags: wellpoint | medicare | health

WellPoint Sees $100 Billion ’Duals’ Market as Care Shifts

Wednesday, 25 Apr 2012 05:23 PM

WellPoint Inc., the No. 2 U.S. health plan, sees a $100 billion market in the states it serves to provide managed care for poor, elderly patients in the Medicare and Medicaid programs.

WellPoint’s purchase last year of CareMore Health Group and its 29 neighborhood health clinics gives the Indianapolis-based insurer an edge in winning the business for so-called dual eligibles, Chief Financial Officer Wayne DeVeydt said Wednesday in a telephone interview. WellPoint has 29 CareMore centers in California, Nevada and Arizona and plans to add 12 more and expand to other states this year, he said.

“Because this is a group that needs highly coordinated care, you really need a model that specializes in that and that’s what CareMore does for us,” DeVeydt said. “It’s kind of our missing link in being prepared for the duals, and we think we’re uniquely positioned versus some of the other companies out there.”

About 9 million people in the U.S. are covered by Medicare, the federal program for the elderly and disabled, and Medicaid, the state-federal plan for the poor. This group accounts for $320 billion in annual spending in the two health programs, said Carl McDonald, a Citigroup analyst, in an April 24 note to clients.

Seeking to cut costs, at least 15 states, led by California, Texas and Florida, may issue contracts in the next two years to let managed-care companies coordinate their medical coverage, McDonald said.

The group “represents an enormous market for the industry,” he wrote.

14 States

DeVeydt, in an interview after WellPoint announced its quarterly earnings, said the company would seek dual-eligible contracts first in the 14 states where it operates Blue Cross plans before trying to expand elsewhere. The company will participate in a pilot project in California to cover dual enrollees starting next year.

“We want to prove to our state partners and to the federal government that we can manage this population well and that we can show better value for them and save the states money,” DeVeydt said.

WellPoint earlier said earnings excluding one-time items were $2.34 a share in the first quarter, beating the $2.30 estimate of 17 analysts compiled by Bloomberg. The company raised its full year forecast for profit excluding certain items to $7.65 a share.

The insurer declined less than 1 percent to $70.40 at the close in New York. The shares fell 2.5 percent in the past 12 months. UnitedHealth Group Inc., based in Minnetonka, Minnesota, is the biggest health insurer by sales.

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