Full Description

WellCare Health Plans, Inc. (WellCare) provides managed care services to government-sponsored healthcare programs, focusing on Medicaid and Medicare. The Company offers prescription drug plans (PDP) and health plans for families, children, the aged, blind and disabled. As of December 31, 2008, WellCare served approximately 2.5 million members. Through its subsidiaries, as of December 31, 2008, the Company operated its Medicaid health plans in Florida, New York, Illinois, Missouri, Georgia and Ohio, and its Medicare Advantage coordinated care plans (CCPs) in Florida, New York, Connecticut, Illinois, Indiana, Louisiana, Missouri, New Jersey, Ohio, Georgia and Texas. It operates Medicare preferred provider organizations (PPOs) in Georgia and Ohio. As of December 31, 2008, the Company operated Medicare PDP in all 50 states and the District of Columbia, and offered Medicare Advantage private fee-for-service (PFFS) plans to Medicare beneficiaries in approximately 1,590 counties and 43 states and the District of Columbia. WellCare operates in two segments: Medicaid and Medicare.

Medicaid

The Company’s Medicaid segment includes plans for individuals who are dually eligible for both Medicare and Medicaid, and beneficiaries of the Temporary Assistance to Needy Families program (TANF), Supplemental Security Income program (SSI), State Children’s Health Insurance program (S-CHIP) and the Family Health Plus program (FHP). The TANF program provides assistance to low-income families with children and the SSI program provides assistance to low-income aged, blind or disabled individuals. The Medicaid segment also includes other programs, which are not part of the Medicaid program, such as S-CHIP and FHP for families who are not eligible for Medicaid. As of December 31, 2008, WellCare had approximately 1.3 million Medicaid members.

The Medicaid programs and services the Company offers to its members vary by state and county, and are designed to serve the various constituencies in the communities it serves. WellCare’s Medicaid plans provide its members with access to a spectrum of medical benefits from many facets of primary care and preventative programs to full hospitalization and tertiary care. Members are required to use the Company’s network, except in cases of emergencies, transition of care or when network providers are unavailable to meet a member’s medical needs, and generally must receive a referral from their primary care physician in order to receive healthcare from a specialist, such as an orthopedic surgeon or neurologist.

Medicare

Medicare is a federal program, which provides eligible persons aged 65 and above, and some disabled persons, a variety of hospital, medical insurance and prescription drug benefits. The Company’s Medicare plans include PDP and Medicare Advantage plans, which include CCP, PFFS and Medicare PPO plans. Medicare Advantage is Medicare’s managed care alternative to original Medicare fee-for-service (Original Medicare), which provides individuals standard Medicare benefits directly through Centers for Medicare & Medicaid Services (CMS). CCPs are administered through a health maintenance organization (HMO) and generally require members to seek health care services from a network of health care providers. PFFS plans are offered by insurance companies and are open-access plans that allow members to be seen by any physician or facility that participates in the Original Medicare program and agrees to bill, and otherwise accepts the terms and conditions of, the sponsoring insurance company. PPO plans are also offered by insurance companies and provide both in-network and out-of-network benefits for Medicare beneficiaries. As of December 31, 2008, the Company had approximately 1.2 million Medicare members.

WellCare, through its Medicare Advantage plans, covers a spectrum of medical services. The Company provides additional benefits not covered by Original Medicare, such as vision, dental and hearing services. PFFS plans are open-access plans that allow members to be seen by any physician or facility that participates in the Medicare program. The Company also offers special needs plans for those who are dually eligible for Medicare and Medicaid (D-SNPs), which are CCPs, in most of its markets. D-SNPs are designed to provide specialized care and support for Medicare beneficiaries, including those who are dually eligible for both Medicare and Medicaid, with frailties or serious chronic conditions.