As baby boomers reach retirement age, government-sponsored health plans such as Medicare and Medicaid will only continue to grow. This trend will be gladly embraced by managed care provider WellCareHealth Plans (NYSE:WCG).

The Florida-based company contracts with health-care providers to deliver health-care services to its members. On Nov. 1, WellCare turned in a monster third quarter 2006: revenues for this quarter increased 104% to $1 billion, compared with $495.5 million for the third quarter of 2005. Total membership grew to 2.2 million members, representing a 151% growth in membership on a year-over-year basis. The impressive results triggered a revised full-year forecast for both revenues and EPS. "We doubled the size of the company over the past year and retained our focus on execution and operational discipline," stated Todd S. Farha, chairman and chief executive officer.

The company's growth is the result of multiple factors. WellCare began offering a prescription drug plan (PDP) on a nationwide basis on Jan. 1 of this year; by the end of the third quarter, the PDP had grown to 911,000. WellCare was the only health plan selected to provide Medicaid services on a statewide basis in Georgia, and at the beginning of June, the company launched new Medicaid health plans in the state. As of Sept. 30, WellCare had approximately 410,000 members from Georgia.

I believe this stock provides Fools with greater upside potential than megacap health-care service companies such as an Aetna (NYSE:AET) or UnitedHealth Group (NYSE:UNH). While Aetna and UnitedHealth Group both saw their net income rise by a remarkable 28% and 31%, respectively, for the third quarter, both stocks are down slightly from a year ago. WellCare, on the other hand, is up 68% from a year ago. The company has only been publicly traded since mid-2004 and has seen its stock price steadily increase as its business has grown. This mid-cap has more in the works, as it looks to continue to grow its membership base through private fee-for-service plans that WellCare recently announced it will begin offering in 38 states beginning on Jan. 1. Given WellCare's recent performance, I would not be surprised to see the company register another lights-out quarter for Q4 2006.

UnitedHealth Group is a Stock Advisor and Inside Value recommendation.

Fool contributor Billy Fisher does not own shares of any of the companies mentioned.