- Anthem, the nation's second largest insurer, saw robust membership growth during the second quarter, adding 1.9 million members, a 4.4% increase over the prior-year period. The growth was fueled entirely by government programs, largely Medicaid and Medicare, while commercial membership declined slightly.
- The Indianapolis-based insurer raised its forecast for the full year as its performance in the second quarter outperformed expectations. Even though COVID-19 cases continue to rise due to the delta variant and non-COVID-19 care resumes, Anthem's medical loss ratio of 86.8% came in below company and analyst expectations.
- Anthem also announced a large Medicare Advantage contract win in New York and will provide MA group coverage to retirees from New York City. The contract win will add up to 200,000 lives, a significant addition to Anthem's MA footprint, CEO Gail Boudreaux said, who characterized it as one of the largest public procurements in group MA in the last decade.
Industry observers are closely watching how quickly patient care bounces back in 2021 after taking a nosedive last year amid the pandemic. Anthem noted Wednesday that patient utilization — at least in some areas — continues to lag behind pre-pandemic levels.
Still, its medical loss ratio, an important measure of how much an insurer is spending on care, rose from the prior-year period, which was lower due to depressed utilization amid the pandemic.
Overall, Anthem said utilization was slightly above normal levels, but still below what it had expected for the second quarter.
Anthem executives provided color on patient trends during a call with investors Wednesday. Inpatient and emergency room visits are still trailing pre-pandemic levels. However, outpatient utilization and doctor visits were a bit above baseline, which executives said they were happy with as it means patients are returning for annual visits and checkups.
Zeroing in on business lines, Medicaid patients had the highest level of deferred care while Medicare and commercial lines of business were slightly above normal, executives said.
The performance in the second quarter gave executives confidence to again raise full-year guidance just after upping guidance in mid-April, following first quarter results. The company increased expectations for revenue, earnings and membership growth.
Still, Anthem cautioned the rising COVID-19 cases pose as a challenge in the remaining quarters.
"We have also taken a slightly more cautious view of the back half of the year, in light of new COVID variants, coupled with a slowing vaccination rate," CFO John Gallina said Wednesday.
Cases are again on the rise in the U.S., fueled by the highly transmissible delta variant, which is gaining a stronghold in areas of the country with low vaccination rates. The U.S. is averaging 26,306 new cases per day, a more than 69% increase over the prior week, according to the Centers for Disease Control and Prevention.
And hospitalizations are again on the rise, averaging 2,794 admissions per day, a nearly 36% increase from the week prior, per the CDC.
However, while Anthem does expect utilization to tick up in the third and fourth quarters, Boudreaux does not anticipate a "surge" in demand for care.
The payer's net income fell to $1.8 billion in the second quarter from almost $2.3 billion same time last year. Profits were higher last year as patient utilization was severely depressed amid pandemic fears and lockdowns. Anthem's total revenue increased to $33.9 billion compared to the prior-year period.
Anthem ended the quarter with 44.3 million members.