Indianapolis-based Anthem lost nearly 70,000 exchange plan members in the third quarter of this year, with many moving from Anthem to another insurer. The migration is expected to continue in the fourth quarter and into 2016. Under the Affordable Care Act, individuals can switch their coverage outside of the open-enrollment periods if they have changes in their life circumstances.
Anthem reported last week that it had 824,000 exchange members as of Sept. 30, down from 893,000 members at the end of the second quarter of 2015.
Anthem CEO Joseph Swedish said people were moving to their competitors because of those insurers' “unsustainable pricing.” He expressed confidence that Anthem would gain more exchange members in the long run. “We are well-positioned for growth as this market stabilizes,” he said.
At the same time, a number of not-for-profit co-op plans, which represent some of Anthem's competition, are folding. Swedish mentioned the co-op closures during an earnings call last week. He said Anthem “will not chase price” to boost exchange enrollment and that insurers will establish more “rational” plan prices in the coming years. Despite higher medical-loss ratios in that group, Anthem is still turning a small profit on the exchange plans, executives said.
Anthem Chief Financial Officer Wayne DeVeydt added that the exchange market will “harden” once the two temporary programs that reduce actuarial risk for exchange plans expire after 2016.
Even with the exchange exodus, Anthem's third-quarter profits jumped 4% to $655 million. The insurer collected more than $19.9 billion in revenue for the quarter, a 7% increase from the same period in 2014. Medicaid remains one of the biggest growth areas.
Anthem will hold a special shareholder meeting Dec. 3 to vote on its $54 billion acquisition of Cigna Corp.