SOURCE: Paragon Financial Limited

Paragon Financial Limited

April 11, 2012 08:20 ET

Ohio Decides Not to Renew Contracts -- Amerigroup Corp. and WellCare Health Plans, Inc. Shares Dip

Paragon Report Provides Stock Research on Amerigroup Corp. and WellCare Health Plans, Inc.

NEW YORK, NY--(Marketwire - Apr 11, 2012) - Companies dependent on Medicaid funding dropped significantly Monday as the state of Ohio decided to change insurers. The state of Ohio has decided not to renew the contracts of Medicaid pure-plays Amerigroup, Centene, Molina Healthcare, and WellCare. The Paragon Report examines investing opportunities in the Health Care Industry and provides equity research on Amerigroup Corporation (NYSE: AGP) and WellCare Health Plans, Inc. (NYSE: WCG).

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"Ouch," said Carl McDonald, analyst with Citigroup Inc. "This is unwelcome news for all of the Medicaid plans, but it is particularly problematic for Molina, since Ohio was the company's most important state." McDonald has called Ohio's decision "pretty rare" and doesn't expect other states to follow suit. "It probably doesn't have much implication," he said. "No two states ever seem to be looking for exactly the same thing, and we've found it virtually impossible to accurately predict the Medicaid plans that will win a particular request for proposal."

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Amerigroup Corporation will report its earnings for the first quarter ended March 31, 2012, at approximately 6:00 a.m. Eastern Time on Wednesday, May 2, 2012. At 8:00 a.m. Eastern Time on the same day, Amerigroup's management will host a conference call and webcast to discuss earnings and other information.

WellCare Health Plans, Inc. recently announced that the United States Attorney`s Office for the Middle District of Florida (USAO) and the Florida Attorney General`s Office have agreed to early termination of the Deferred Prosecution Agreement (DPA) entered into on May 5, 2009. The DPA termination is effective immediately and includes an agreement to seek dismissal of the criminal charges against the company within five days. This action acknowledges that WellCare has fulfilled all of its obligations under the DPA.

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