WellCare Health Plans Inc. (WCG) has been on an uptrend since the beginning of this month, reflecting investors’ enthusiasm about its developments so far.
Among others, WellCare announced to receive the approval from South Carolina Department of Health and Human Services (SCDHHS) to offer Medicaid in six additional counties effective Jan 1, 2014.
With the addition of six new counties – Chesterfield, Charleston, Kershew, Greenwood, Spartanburg and McCormick, the company will now be offering Medicaid to beneficiaries in 45 out of 46 counties of South Carolina. Apart from South Carolina, WellCare operates Medicaid Health plans in Georgia, Florida, Kentucky, Hawaii, New York, Missouri and Ohio.
Moreover, membership from Carolina Medical Homes (CMH) is expected to move to WellCare on Jan 1, 2014 as a result of changes being made by SCDHHS to its Healthy Connections Choices Medicaid managed care program, and WellCare’s pending purchases of certain assets from CMH.
On receiving the new approval, the company assured that almost all the new members who will be transitioning from CMH can continue with their current and primary care provider.
The new approval is anticipated to fortify WellCare’s top-line growth reflecting higher total premiums.
WellCare served nearly 50000 Medicaid and 11000 Medicare Prescription Drug Plan members in South Carolina as on Sep 30, 2013. Additional exposure to six new counties of South Carolina will consolidate the company’s membership base further.
With respect to its earnings performance, WellCare delivered positive earnings surprises in 2 of last 4 quarter with an average beat of 1%. However, this Zacks Rank #3 (Hold) healthcare stock has not seen any estimate revisions over the last 7 days. The latest price appreciation is certainly encouraging, but make sure to keep a close watch of this firm in the near future before investing in it.
Some other better-ranked healthcare stocks include IPC The Hospitalist Company, Inc. (IPCM), Envision Healthcare Holdings, Inc. (EVHC)and Acadia Healthcare Company Inc. (ACHC). All these stocks carry a Zacks Rank #2 (Buy).
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