Anthem profits up 30% despite 1M decrease in enrollment

Anthem reported strong profit growth as expenses fell slightly and revenue remained flat during the first quarter of fiscal year 2018.

Here are four things to know about the insurer's financial results for the three months ended March 31.

1. Anthem reported operating revenue of $22.3 billion in the first quarter of this year, reflecting little to no change from the same period in 2017. The insurer said the flat revenue resulted from premium increases that covered overall cost trends across business lines and the return of the ACA's health insurance tax in 2018. While Anthem also saw revenues increase due to recent acquisitions of two Medicare Advantage health plans serving Florida residents, HealthSun and America's 1st Choice, these increases were offset by Anthem's reduced footprint in the ACA marketplace, as well as declines in its local group fully insured and Medicaid businesses.

2. The insurer's ACA marketplace pullback was a large driver in a year-over-year decrease of 1 million Anthem members to 39.6 million in the first quarter of 2018.

3. At the same time, the insurer's expenses fell 1.2 percent to $20.8 billion, down from $21 billion in the first quarter of 2017. Anthem also said its benefit expense ratio, or the amount it pays toward members' medical expenses, came in better than expected at 81.5 percent, compared to 83.7 percent in the same period in 2017.

4. Anthem ended the first quarter of 2018 with net income of $1.3 billion, up 30 percent from the same period a year prior. Looking forward, Gail K. Boudreaux, president and CEO of Anthem, said, "Throughout 2018, we are prioritizing investments to create a more flexible infrastructure that can quickly respond to the evolving needs of our customers and the changing healthcare environment."

More articles on payer issues:
Iowa delays contract negotiations for $5B Medicaid program
BCBS of Texas: Some members may have to pay entire bill for nonemergent use of out-of-network ED
DOJ requests information from Cigna, Express Scripts as merger review continues

© Copyright ASC COMMUNICATIONS 2018. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Top 40 Articles from the Past 6 Months