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BUSINESS A25
Thursday 28 January 2016
Anthem 4Q profit falls 64 pct, misses expectations
ment business, which also vantage customers. That
acquisition is undergoing
includes privately run regulatory review, and it
has drawn concern from
Medicare plans, jumped doctor groups and some
members of Congress over
17 percent to more than how it may affect consum-
ers. Anthem said Wednes-
$10.6 billion. Anthem made day it still expects the deal
to close in the second half
its name nationally as a of this year.
The insurer covered 791,000
provider of private Blue people through the ACA’s
public exchanges at the
Cross Blue Shield cover- end of last year. Unlike
other insurers, Anthem said
age, but it pegs more of its that business has been
profitable, but enrollment
future growth on govern- came in about 30 percent
lower than it expected.
ment business. Larger rival UnitedHealth
Group Inc. and other in-
Many states are expanding surers have said their ex-
change business has
eligibility for Medicaid pro- struggled in particular with
customers who have been
grams, which cover poor allowed to sign up outside
open enrollment periods.
and disabled patients, un- Those customers tend to
generate more claims than
der the ACA, and they also those who sign up during
open enrollment.q
The Anthem logo hangs at the health insurer’s corporate head- are asking insurers to run
quarters in Indianapolis. Anthem reported financial results,
Wednesday, Jan. 27, 2016. those programs.
(AP Photo/Michael Conroy, File) “We expect to be front-
and-center supporting
TOM MURPHY $1.14 per share, while op- these states’ initiatives,”
erating revenue, which
AP Business Writer excludes investment gains, Chairman and CEO Joseph
rose more than 6 percent
Anthem’s fourth-quarter to around $20 billion. Swedish told analysts dur-
Analysts expected, on av-
earnings tumbled 64 per- erage, earnings of $1.21 ing a Wednesday morning
per share on $19.91 billion
cent as the health insurer in revenue, according to conference call.
a survey by the data firm
absorbed some sizeable FactSet. The company also ex-
Anthem operates plans in
expenses and booked big markets like California, pects to expand its gov-
New York and Ohio. It also
fewer customers than it sells coverage on public ernment business even
insurance exchanges in 14
expected through the Af- states. more once it completes
The insurer said Wednes-
fordable Care Act’s public day that it booked in the its $48-billion acquisition
fourth quarter $51.5 million
insurance exchanges. in costs tied to its pending of Cigna and adds that
acquisition of rival insurer
The Blue Cross Blue Shield Cigna Corp. and a charge company’s Medicare Ad-
of $42.3 million related to
insurer continued to ex- changes in tax calculations
for California.
pand its business from Operating revenue from
the insurer’s govern-
government programs like
Medicaid and reaffirmed
its forecast for the new
year. But earnings fell short
of Wall Street expectations,
and its stock price fell more
than 2 percent in after-
noon trading Wednesday.
Overall, fourth-quarter
earnings totaled $180.9 mil-
lion, down from $506.7 mil-
lion in the previous year’s
quarter.
Adjusted results totaled
