Anthem said total membership and revenue in its health plans are growing heading into 2017, a year the insurer expects its Obamacare business to be “break-even to slightly profitable.”
In reporting its fourth-quarter 2016 earnings, Anthem CEO Joe Swedish urged Congress and the Trump administration to take a “measured approach” to any changes to the Affordable Care Act. Insurers worry lawmakers will make changes that could disrupt insurance markets.
Anthem, which operates under the Blue Cross and Blue Shield brand in 14 states, remains a major player offering individual coverage under the ACA. But it cannot commit to long-term participation until policymakers make changes such as curtailing special enrollments and shoring up risk pools.
Anthem, which is amid a court challenge to its acquisition of Cigna, reported fourth-quarter net income of $368.4 million, or $1.37 per share. That compares with $180.9 million, or 68 cents per share in the fourth quarter of 2015 that included “net negative adjustment items.” Operating revenue rose 7.3% to $21.5 billion in the fourth quarter.
Anthem said it grew by 3.4%, or 1.3 million members, in 2016 to 39.3 million total members, driven largely by a large increase in Medicaid membership. Under the ACA, 31 states and the District of Columbia expanded Medicaid for poor Americans, and that program has worked out well for insurers like Anthem, Aetna, UnitedHealth Group and others. Anthem’s Medicaid enrollment grew last year by 613,000 members to nearly 6.6 million.
Anthem’s individual business, largely made up of ACA-compliant plans sold on public exchanges, ended the year with 1.6 million members, which was largely flat growth.
Looking ahead, Anthem isn’t committing to remaining in all of its markets beyond this year until it sees policymakers in Washington making changes to help insurers better manage the larger-than-expected number of sick Americans signing up for coverage.
“We have weighed in considerably with all the leadership in Congress,” Swedish told analysts on the company’s hour-long fourth-quarter earnings call.
Anthem and other insurers want certain special enrollment periods that allow Americans to sign up for coverage year-round to be eliminated because they make it difficult for actuaries to predict costs. In addition, insurers say “risk adjustment model” needs to be updated to improve risk pools that currently see more sick Americans with chronic conditions than younger and healthier people.
“If we cannot see stability going into 2018…then we will begin making some very conscious decisions,” Swedish said. “We are still in a state of evaluation.”
Anthem expects medical membership in 2017 to be “in the range of 40.1 million and 40.3 million” and net income to be “greater than $11.11 per share.” Anthem’s outlook for 2017 doesn’t include any benefits or costs from Cigna should the deal come together this year.
Date: February 06, 2017