NEW YORK, NY -- (Marketwire) -- 07/11/12 -- Medicaid companies soared Monday after major insurer WellPoint announced it had agreed to pay 4.9 billion for Amerigroup. The two companies combined would have approximately 4.5 million Medicaid members across 19 states. Shares of Centene Corp., WellCare Health Plans Inc., and Molina Health Care Inc. all saw increases of 17 percent or more Monday. Five Star Equities examines the outlook for companies in the Health Care Plans Industry and provides equity research on Centene Corp. (NYSE: CNC) and Molina Healthcare, Inc. (NYSE: MOH).
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"We believe that this combination will create an industry leader in the government sector serving Medicaid and Medicare enrollees," WellPoint CEO Angela F. Braly said in a statement. "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 announcement increased speculation that more mergers may be coming. The recent decision by the Supreme Court to uphold "Obamacare" could potentially see Medicaid enrollment increase by 17 million patients over the next 10 years.
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Centene Corporation, a Fortune 500 company, is a leading multi-line healthcare enterprise that provides programs and related services to the rising number of under-insured and uninsured individuals. The company recently reported that the state of Kansas has awarded its subsidiary, Sunflower State Health Plan, a statewide contract to serve Medicaid beneficiaries in Kansas. Pending regulatory approval, operations are expected to commence on January 1, 2013.
Molina Healthcare provides quality and cost-effective Medicaid-related solutions to meet the health care needs of low-income families and individuals and to assist state agencies in their administration of the Medicaid program. The Company's licensed health plans in California, Florida, Michigan, Missouri, New Mexico, Ohio, Texas, Utah, Washington, and Wisconsin currently serve approximately 1.8 million members.
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