WellCare Health Plans Inc. CEO Kenneth Burdick said his company is not likely to embrace the individual health insurance exchange marketplace anytime soon, and is not straying from its current focus on growing its existing Medicaid and Medicare businesses.
The insurer had cautiously tested the waters by selling individual plans in the Affordable Care Act exchange marketplaces in Kentucky and New York, but it later pulled out after seeing the "writing on the wall," Burdick said during a second-quarter earnings call.
WellCare is also not very keen on buying healthcare providers, according to the CEO, although M&A as a strategy remains key to its growth plans for both Medicaid and Medicare businesses. The company can maintain its successful partnerships with provider groups without having to acquire them, he said.
But executives also maintained that WellCare's appetite for acquisitions in general has not diminished following the recent purchase of Universal American Corp. CFO Andrew Asher said the company is actively looking out for "acquisitions of all types and sizes."
When it comes to Medicaid, Burdick sees "a decade of substantial growth" in the space. The current administration's plans to make states take on greater fiscal responsibilities could lead to "more experimentation" at the state level, which could mean opportunities for WellCare as states are forced to deal with budgetary constraints while at the same time meeting the healthcare needs of low-income groups.
The WellCare CEO expects Medicare Advantage, a private sector alternative to traditional Medicare, to present growth opportunities for the entire industry.
"The growth of [Medicare Advantage] relative to sort of traditional fee-for-service Medicare has been nothing short of incredible over the past 6 or 7 years, even in a climate where reimbursement was not keeping up with cost trends," Burdick said.
Burdick also announced on the call that the company renewed its pharmacy benefit management contract with CVS Health Corp. for 2019 and 2020. He did not, however, divulge any details on the contract.