WellPoint becomes Medicaid giant

July 9, 2012

Clearly this is WellPoint's vote of confidence in the future Medicaid market

With its announced acquisition of Amerigroup, WellPoint will become the largest managed care Medicaid organization in the United States. The addition of 2 million Amerigroup members will bring its total Medicaid membership to 4.5 million.

Observers believe the price offered by WellPoint sealed the deal. Otherwise, Amerigroup itself would have been in a good position to grow in the next three to five years.

The Medicaid market previously was labeled to grow by 17 million members thanks to health reform expansion, however, the revised expansion forecast still faces many variables of uncertainty. With states having the option to skip the expansion, new Medicaid coverage could fall short of early expectations.

Another source of Medicaid growth could come from a coincidental awareness among the currently eligible who are not enrolled. The insurance exchanges are meant to facilitate enrollment and could actually inspire more of the current population to come out of the woodwork.

In Ohio for example, the governor expects 165,000 kids and 153,500 adults who are currently eligible but not enrolled to make their way to the exchanges and sign up.