Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Finance
January 27, 2021 02:33 PM

Anthem's Q4 profits drop 41% with added COVID costs, patient care

Nona Tepper
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    AP

    Anthem reported a 41% year-over-year drop in fourth-quarter profits for 2020, with increased COVID-19 costs and a surge in patients seeking delayed care bringing profits to $551 million.

    The Indianapolis-based insurer, which operates Blue Cross and Blue Shield plans in 14 states, reported $4.6 billion in profits at the end of 2020, a slight dip compared with the $4.8 billion it reported in 2019. At the end of the fourth quarter ended Dec. 31, Anthem reported a medical-loss ratio of 88.9%.

    Anthem was hit with a $250 million Medicaid clawback expense at the end of 2020, bringing its total Medicaid risk-sharing payments to $650 million for the year. But even with the higher-than-expected clawback costs, CEO Gail Boudreaux said Anthem still met its Medicaid membership goals for the year.

    "We had strong organic growth in Medicaid aided by a pause on reverification and new strategic offerings in Nebraska and Missouri," Boudreaux said.

    Government plans proved to be a bright spot for Anthem in 2020.

    The company's total membership reached 42.9 million for the year, up 1.9 million members from 2019, with Medicaid and Medicare plans driving the lion's share of growth. In the fourth quarter, 300,000 more people signed on to the company's Medicaid plans, bringing total membership up 21% year-over-year to 8.8 million people. The company also counted 2.3 million people as Medicare customers, up 11% year-over-year.

    As the COVID-19 pandemic continued to wreak havoc on the nation's economy, membership among the company's commercial plans remained essentially flat, with Anthem's commercial enrollees reaching 30 million by the end of 2020.

    Operating revenue totaled $31.5 billion in the fourth quarter, up 16% from $27.1 billion in the prior-year period, with the early receipt of some payments and growth in Medicare and Medicaid premium revenue because of the return of the health insurance tax. Total revenue for the year reached $121.9 billion, up 17% year-over-year from $104.2 billion.

    "It is clear we're still in the depths of a global pandemic," Chief Financial Officer John Gallina said.

    In 2021, Anthem expects Medicaid membership to continue to drive growth, particularly after acting HHS Secretary Norris Cochran's letter on Tuesday saying that the public health emergency is expected to continue through the year. Gallina said he expects North Carolina's new Medicaid program and a hold on redeterminations later this year will boost membership in the state by double digits.

    Going forward, Anthem expects total membership to reach up to 44.7 million for the year. The company also expects operating revenue of $135.1 billion in 2021, and earnings per share to reach $24.50, with COVID-19 costs continuing cutting into its bottom line.

    Gallina expects coronavirus testing, vaccination and other pandemic-related costs to reach $600 million in 2021. An increase in Medicaid physician rates, the sequestration and passing of the consolidated appropriation bill will chop $0.50 off its individual share price, he added. Payment deferrals that were allowed under the CARES Act will also end in 2021, negatively impacting the company's cash flow.

    Anthem struggled to price some physician visits appropriately as more providers didn't include risk codes during the quarter, Gallina said.

    "We do believe there is pent-up demand in system, we do believe there will be a change of higher acuity when folks get care, most pronounced in the Medicare line of business," Gallina said. "The question is not if those will happen, because we do believe they will happen. The question is to what extent."

    The new administration has also brought some uncertainty to Anthem's business. President Joe Biden has floated plans to require insurers to foot the bill for COVID-19 testing for employees and students. This would represent a break from tradition, Boudreaux said, since employers generally pay for things like flu vaccines for employees, and states usually pay for public health needs. Paying for additional testing is not in the company's guidance.

    But the Biden administration does represent a bright spot for the company's exchange business, according to Pete Haytaian, president of Anthem's commercial and specialty business division. Anthem expanded into 115 new counties in individual markets in 2021.

    "The new administration looks like they're going to promote and prop up the ACA business," Haytaian said. "We just heard this week we'll likely see an extension to open enrollment."

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Money arrows increase up
    Takeaways from health systems' first-quarter earnings results
    medicare advantage stars covid
    CVS expects $1B hit from Medicare Advantage star ratings dip
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing