WellPoint Acquires Amerigroup to Expand Medicaid Business
- Mon, 7/9/12 - 2:59pm
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WellPoint, Inc, the second largest health insurer in the United States, announced today that it has agreed to acquire Amerigroup Corp in an all-cash deal for approximately $4.9 billion. The deal coincides with an anticipated expansion of Medicaid in 2014, when millions more people are expected to have health insurance as part of the Patient Protection and Affordable Care Act (ACA).
Amerigroup has a membership of approximately 2.2 million people in 13 states and focuses on government programs such as Medicaid and Medicare. When the deal is completed in the first quarter of 2013, WellPoint will serve >4.5 million people in state-sponsored healthcare programs, including Medicaid programs in 19 states, according to a company news release.
The new company will also serve dual-eligible (Medicare and Medicaid) beneficiaries in 13 states. According to the Congressional Budget Office, 32 million people will gain health insurance by 2014, including 16 million through Medicaid. Another ACA provision deals with the creation of health insurance exchanges in each state. The exchanges are marketplaces in which individuals and small businesses can buy insurance and search for different plans, similar to an online service where consumers search for airlines or hotels.
"We believe that this combination will create an industry leader in the government sector serving Medicaid and Medicare enrollees," Angela Braly, chief executive officer of WellPoint, said in a news release. "This is an opportunity to capitalize on the strengths of both companies to better serve our members and position our companies for future growth as the health insurance industry changes and as we prepare for health insurance exchanges."
The news release is available at http://ir.wellpoint.com/phoenix.zhtml?c=130104&p=irol-newsArticle&ID=171...