New enrollments push Anthem beyond expectations in Q1

In this May 14, 2019, file photo a flag flies outside the corporate headquarters building of health insurance company Anthem in Indianapolis. Anthem delivered a better-than-expected first quarter and pushed its 2021 forecast past expectations, as growing enrollment and a pharmacy benefits business helped the health insurer. The Blue Cross-Blue Shield insurer said Wednesday, April 21, 2021, that it now expects full-year earnings to come in at greater than $25.10 per share. (AP Photo/Michael Conroy, File)

INDIANAPOLIS (AP) — Anthem delivered a better-than-expected first quarter and pushed its 2021 forecast past expectations as enrollment growth lifted the health insurer.

A 20% jump in membership for state and federally funded Medicaid plans that Anthem manages spurred a 3% overall enrollment gain compared to last year's opening quarter.

The Blue Cross-Blue Shield insurer has 43.5 million customers and is the nation's second-largest health insurer, trailing only UnitedHealthcare.

Anthem said Wednesday it has about 9.2 million Medicaid customers, up from 7.6 million last year. Growth was helped by a temporary suspension during the COVID-19 pandemic of state requirements that Medicaid customers certify they are still eligible to receive the benefits.

Indianapolis-based Anthem covers people in several states, including big markets like New York and California. It also runs a pharmacy benefits management business called IngenioRx.

The insurer also booked 15% enrollment growth in its smaller Medicare Advantage business.

Those gains and growth from IngenioRx helped boost company operating revenue by 9%, to $32.1 billion in the quarter. The figure excludes investment gains.

Wall Street had been looking for revenue of $32.97 billion.

Net income climbed 9% to $1.66 billion even though the company’s business took a hit from costs tied to the COVID-19 pandemic, with Anthem covering the administration of tests and vaccinations.

But company officials also told analysts during a conference call that hospitalizations tied to COVID dropped earlier and sharper than they anticipated in the quarter.

Adjusted earnings ended up at $7.01 in the quarter that ended March 31. Analysts were expecting $6.38 per share on average.

The Blue Cross-Blue Shield insurer said Wednesday that it now expects full-year adjusted earnings to come in at greater than $25.10 per share after starting 2021 with a forecast that fell well short of Wall Street projections.

Analysts expect, on average, earnings of $24.70 per share, according to FactSet.

Shares of Anthem Inc. slipped 81 cents to $381.07 while broader trading indexes rose slightly in late-morning trading Wednesday. The stock had already climbed about 19% so far this year, as of Tuesday’s close.

That's nearly twice as high as the S&P 500's advance over the same span.

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Follow Tom Murphy on Twitter: @thpmurphy