WellCare buys Meridian for $2.5 billion

WellCare Health Plans is acquiring Meridian, a regional health insurer that covers more than 1 million Medicaid patients in Michigan and Illinois, for $2.5 billion. Meridian also has a small Medicare Advantage business and a pharmacy benefit manager.

The big picture: WellCare is already one of the largest Medicaid contractors in the country with 2.7 million Medicaid enrollees. This deal adds to the industry consolidation spree and shows that companies continue to believe in the profit opportunity within government health care programs.