Like many of its peers, Anthem Inc. saw an influx of Medicare Advantage members after this year’s enrollment period. The company saw its total Medicare Advantage membership increase from 1 million to 1.21 million members, an increase of more than 20 percent.
“Frankly, it was some of the strongest growth we’ve ever seen,” Anthem CEO Gail Boudreaux said in response to analyst questions during an earnings call on Wednesday.
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Boudreaux said the growth cemented Anthem’s position as the fourth-largest Medicare Advantage plan in the U.S. The company expects that growth to continue this year, with plans to add between 150,000 and 200,000 Medicare Advantage members in 2020.
Competitors Humana and UnitedHealth Group still lead the market for Medicare Advantage enrollment. UnitedHealth said it also saw record growth, adding 325,000 Medicare Advantage members in 2019 and with expectations to add 700,000 in 2020.
Anthem saw its total enrollment increase by 1.1 million in 2019, for a total enrollment of 41 million at the end of the year. The majority of the new additions — 854,000 — were in its government business.
The company reported operating revenue of $103 billion last year, and operating cash flow of $6.1 billion. Its revenues increased 12.9 percent from the prior year, driven by membership growth, rate increases and the company’s new pharmacy business.
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In March, the company launched its IngenioRx pharmacy benefit manager, a few months earlier than its expected 2020 rollout due to ExpressScript’s acquisition by Cigna. It will serve both Anthem- and non-Anthem customers, with CVS offering its Minute Clinic, prescription fulfillment and claims processing services for the next five years as part of an agreement with the new PBM.
Anthem expects IngenioRx will generate $4 billion in savings for the company next year.
“We’re actually very excited about that, because at the end of the day, that $4 billion in savings makes healthcare more affordable,” Anthem CFO John Gallina said in an earnings call.
Despite Anthem’s membership and earnings growth, the company’s stock still slid by 6 percent to $272.91 at market close on Wednesday. Investors expressed concerns over the company’s increased medical loss ratio at the end of the year, a measurement that indicates the percent of premiums spent on care.
Anthem’s medical loss ratio jumped to 89 percent in the fourth quarter of 2019. The company said the increase was primarily affected by the suspension of the Affordable Care Act’s health insurance tax last year. An early flu season and a growing portion of Anthem’s business being tied to Medicare and Medicaid also affected costs.
Going into 2020, Anthem predicts revenues of $117 billion and total membership of 41.9 to 42.3 million. It expects a medical loss ratio of 85.8% for the full year.
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