A surge in new enrollees in Anthem's Medicare business helped overcome declines in its commercial insurance sector to spur higher-than-expected profits in the fourth quarter.
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Profits at the Indianapolis-based company in the three months through December were down 66 percent to $424 million, or $1.61 per share. Adjusted for several items, net income was $2.44 per share, higher than the $2.20 that analysts were expecting. Total revenues were up 3 percent to $23.3 billion, in-line with Wall Street predictions, it said on Wednesday.
In 2018, Anthem achieved its goal of “improving of improving execution and strengthening our value proposition," according to CEO Gail Boudreaux.
"Our fourth quarter and full year performance provides a strong foundation for 2019,” she said in a statement.
The company expects 2019 profits to be greater than $18 per share and total membership to be as high as 41 million. It ended 2018 with nearly 40 million enrollees. Anthem also expects to open its in-house pharmacy benefits management business earlier than expected. It will now end its partnership with Express Scripts on March 1, 2019.
Anthem – a subsidiary of Blue Cross Blue Shield and the nation’s second-largest insurer -- previously exited most of the markets created by Obamacare to instead focus on its Medicare Advantage business, a private operation that contracts with the federal health plan for those 65 years of age and older.
Enrollment in the program grew 35 percent in the quarter to 1.8 million individuals, sending revenues up 16.2 percent to $14.5 billion, while membership in the Obamacare plans fell 59 percent to 655,000.
The company is returning to the individual market in states including Ohio and Virginia after leaving in 2017.