WellCare up after winning Georgia Medicaid contracts

<p>WellCare Health Plans Inc. stock reached a 52-week high Tuesday after the government-focused health-benefits company won contracts to provide Medicaid managed-care plans in Georgia.</p><p>Shares of Tampa, Fla.-based WellCare closed up $2.49, or 6.1 percent, to $43.14 on the New York Stock Exchange. Shares traded as high as $43.35, above the 52-week high of $41.39 set Wednesday.</p><p>Georgia, which plans to shift more than one million Medicaid beneficiaries and uninsured children to managed-care plans next year, awarded St. Louis-based Centene Corp. contracts in two regions of the state's six region and Virginia Beach, Va., based Amerigroup Corp. contracts in five regions.</p><p>All three companies were awarded contracts in the Atlanta region. WellCare will compete with one other managed-care provider in the other five regions.</p><p>On the NYSE, shares of Amerigroup, which Tuesday slashed its 2005 earnings outlook, fell 2 cents to $44.50, while Centene shares fell 45 cents, or 1.2 percent, to $36.</p><p>The state, which has the option of renewing the contracts for six one-year periods, projects it will save $60 million in fiscal 2006 and $200 million in fiscal 2007 through the managed-care program.</p><p>In fiscal 2005, Medicaid accounted for 43 percent of all new state revenue. Left unchecked, it will consume 60 percent of all new state revenue by fiscal 2011, the department said.</p><p>Industry watchers and companies have said that state efforts to rein in Medicaid costs is a winning proposition for Medicaid managed-care operators, which are seen as helpers in controlling expenses.</p>