A desire to take advantage of the growing medical needs of Baby Boomers is apparently behind an Indiana health insurance provider's plan to acquire California health insurer CareMore.

Indianapolis-based WellPoint announced last week it would acquire Cerritos-based CareMore, but did not make terms of the deal public. The New York Times reported that WellPoint will pay $800 million for CareMore, but a company representative declined to confirm that figure.

CareMore provides coverage to roughly 54,000 people across California, Nevada and Arizona. Because a majority of its customers have chronic conditions, CareMore specializes in managing care for patients whose medical needs require many prescriptions and visits to assorted doctors and specialists. It runs 26 clinics and - of special interest to WellPoint, it seems - offers Medicare Advantage plans. Medicare Advantage plans are like the government's Medicare program, but they are run privately and offer basic Medicare coverage plus a few extras like dental and vision coverage.

Commentators have speculated that WellPoint was attracted to CareMore's portfolio of Medicare Advantage plans. WellPoint CEO and chairwoman Angela Braly released a statement pointing out that over one million Baby Boomers will become eligible for Medicare every year until 2030 in the 14 states in which WellPoint offers coverage. She called the Medicare market a "particularly significant" part of WellPoint's expansion plans.WellPoint officials have said in the past they plan to pursue a growth strategy of absorbing smaller firms through mergers and acquisitions.

The deal is supposed to close by the end of the year.

Source: Associated Press, "WellPoint to buy Medicare Advantage plan provider," 8 June 2011.