TOPEKA, Kan. (AP)—Kansas will review plans announced Monday by the nation’s second-largest health insurance company to buy another firm recently awarded a contract to help manage the state’s Medicaid program.
WellPoint Inc., based in Indianapolis, said it will acquire Amerigroup Corp., headquartered in Virginia Beach, Va., for about $4.46 billion. WellPoint expects to close the transaction by the end of March 2013 if Amerigroup stockholders approve.
The purchase comes as Gov. Sam Brownback’s administration is overhauling the state’s $2.9 billion-a-year Medicaid program, which provides health coverage to the poor, disabled and elderly. The state expects to turn the program’s management over to three private companies in January.
The state awarded one of its contracts two weeks ago to an Amerigroup subsidiary, Amerigroup Kansas Inc. Because the subsidiary is a Kansas company, the WellPoint acquisition must be reviewed by Insurance Commissioner Sandy Praeger’s office, spokesman Bob Hanson said.
Hanson said that once WellPoint files an application with Praeger’s office, a review should take about two months. He said Kansas is among 15 states that must review the transaction.
Meanwhile, the state’s three-year Medicaid contract with Amerigroup’s subsidiary remains in place, said Miranda Steele, spokeswoman for the state Department of Health and Environment. Brownback’s administration contends the overhauled Medicaid program, renamed KanCare, will coordinate services better for participants while reining in the state’s growing costs.