Anthem saw revenue increase in the first quarter of 2016, but higher medical costs in certain business segments dragged down the insurer's bottom line.
Anthem recorded operating revenue of nearly $20.3 billion in the first quarter of 2016, an increase of 6.5 percent over the $19.05 billion reported in the same quarter of the year prior.
The financial boost was largely attributable to growth in medical plan enrollment, which increased 2.8 percent year over year to 39.6 million members as of March 31. Membership in the insurer's Medicaid plans climbed to more than 6 million in the first quarter of 2016, up 7.6 percent from the year prior.
Anthem ended the quarter with net income of $703 million, down 18.7 percent from $865.2 million in the same period of the year prior.
The drop in profitability was attributable to a rise in Anthem's medical-loss ratio. The MLR was 81.8 percent in the first quarter of 2016, up from 80.2 percent in the same period a year prior. The increase was largely driven by higher medical costs in Anthem's Medicaid and individual segments.
Anthem Executive Vice President and CFO Wayne DeVeydt said he is pleased with the insurer's performance in the first quarter of 2016.
"Our results reflect continued execution across our business segments as the industry continues to evolve," he said.
More articles on payer issues:
CMS finalizes Medicaid managed care overhaul: 5 things to know
UnitedHealth to exit most ACA exchanges in 2017, remain in only 'handful' of states
Humana's mistake: Telling thousands their medication wasn't covered