Dive Brief:
- Yesterday, Anthem announced an unexpected 64% drop for its 2015 Q4 profits, attributing it to increased expenses from its individual health insurance business.
- The company's earnings report indicates benefit expenses shot up almost 10% to $16.3 billion, resulting in a 2015 Q4 profit of just $180.9 million, compared to its 2014 Q4 profit of $506.7 million.
- However, Anthem's Medicaid business was more than sufficient to make up for the drop from marketplace individual plans and ensure the company turned a profit, Forbes noted.
Dive Insight:
Because enrollment and medical expenses have been difficult to gauge, Anthem has not been alone in struggling to find its footing with its exchange offerings.
Anthem CEO Joe Swedish told analysts the company has not experienced the growth it expected when it began serving individual market members, Forbes reported. The company finished the year with 30% fewer exchange plan members than it originally anticipated.
Anthem added in a press statement as it heads into 2016, it believes its strategy will be enhanced with the pending acquisition of Cigna, which could close in the second half of 2016 if approved by federal anti-trust regulators.