Where others are crying failure and leaving the marketplace, Anthem has not only gained customers under the Patient Protection and Affordable Care Act (PPACA) and plans to stick with the program.
According to Forbes, although other companies claim not to have been so fortunate — UnitedHealth Group, for instance, is dropping out of all but a few exchanges — Anthem sees opportunity beckoning. After a year of growth — not only were its earnings better than expected, but it added 1 million new customers since the end of last year, 184,000 of whom were Obamacare enrollees — the company expects to do even better next year, particularly if its planned merger with Cigna gets the green light.
Anthem’s Blue Cross and Blue Shield brand is selling in 14 states, and the company expects to remain in those markets next year. Joe Swedish, Anthem’s chairman, was quoted as saying in an analyst conference call, “I think a sustainable model can be built … This remains a dynamic marketplace. Over time, we do believe we are well positioned for sustained growth.”
Earnings for Anthem also came in higher than exepected, beating analyst estimates by more than 10 cents per share, coming in at $3.46 for the first quarter. Its business grew in government, commercial, and specialty insurance sectors. Not only did it gain customers from the exchanges, its Medicare business grew thanks to expanded coverage — Medicaid membership rose 7.6 percent and revenue from premiums grew 7.8 percent to $18.99 billion.
The company also said it now expects revenue for 2016 to fall in the range of $81 billion to $82 billion, up from its previous estimate of $80 billion to $81 billion.
Of course the company has raised prices on exchange products — and it’s also benefiting from an exodus of other providers, some of which were cooperative plans that fell apart. Some companies complained that purchasers of coverage on public exchanges have been more in need of medical care and thus more expensive to their insurers; that negative risk profile has given them pause.
Not so Anthem, which plans to complete the Cigna merger in the second half of the year. It sees the move as allowing the resulting company to offer a more financially stable book of business to its customers.
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