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3 Ways Anthem Seems... Different

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Anthem Inc. released its earnings for the fourth quarter of 2017 today, and it held a conference call to go over its with securities analysts.

During the call, executives from the Indianapolis-based health insurer did something that has become unusual during health insurers’ earnings calls: They talked about wanting to sell commercial health insurance coverage, and, possibly, to sell it through agents and brokers.

Anthem is a company that holds the Blue Cross license, the Blue Shield license, or both in 14 states. It also sells products other than traditional major medical coverage throughout the United States.

Here’s a look at three highlights from its earnings call and its earnings release, for agents.

1. Anthem executives sometimes use words like “agent” and “broker,” and they sometimes refer to wanting commercial health insurance business without apologizing for that.

Executives from one major competitor, UnitedHealth Group Inc., said during their company’s recent fourth-quarter earnings call that they see UnitedHealth as a company that uses data to improve the health care system.

CVS Health Corp. has agreed to acquire Aetna Inc., put health care coordination services in the front of CVS stores, and put health insurance ”kind of in the background.”

Today’s conference call is the first Gail Boudreaux, Anthem’s new president, has participated in since she took over from Joseph Swedish as Anthem’s president. A securities analyst asked Boudreaux whether she wants Anthem to emulate competitors and move to a model that offers “a lot more than largely an insurance product.”

Boudreaux said she wants to see Anthem get faster and better at offering health insurance products, both to clients and to brokers.

(Related: 3 Possible CVS-Aetna Deal Effects, for Agents)

Anthem will continue to compete hard for managed Medicaid plan contracts, and it will work with agents to improve its position in the group and individual Medicare Advantage markets, Boudreaux said.

On the commercial side, Boudreaux said, “I think there’s an opportunity for us to do more.”

2. Anthem says it wants to add to its commercial health insurance product menu.

Anthem has opportunities to use people’s familiarity with the Blue Cross and Blue Shield brands, and Anthem’s expertise with local markets, to design attractive new products, Boudreaux said.

3. Anthem wants to improve business-to-distributor technology, as well as business-to-consumer technology.

Anthem is revamping its portals for customers and care providers this year, and it’s also revamping its broker portals, Boudreaux said.

Anthem's headquarters (Photo: Diego M. Radzinschi/ALM)

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(Photo: Diego M. Radzinschi/ALM)

Brian Griffin, head of Anthem’s commercial specialty business, said he sees improvements in Anthem’s broker portal as a good way to help brokers compare products, and to increase brokers’ awareness of Anthem’s dental and vision products.

Thanks to portal improvements, “we are getting a great reaction from the broker community,” Griffin said. “I think we will get deeper penetration rates as a result of it.”


Anthem is reporting $1.2 billion in net income for the fourth quarter on $23 billion in revenue, compared with $368 million in net income on $21 billion in revenue for the fourth quarter of 2016.

Results for the latest quarter include a $1.1 billion gain related to the new Tax Cuts and Jobs Act.

Income before income tax items fell to $124 million, from $659 million.

The company ended 2017 providing or administering health coverage for 40.2 million, up from 39.9 million people a year earlier. The only markets in which enrollment changed by more than 3% were the Medicare plan market and the individual commercial market.

The company’s individual commercial enrollment fell 4.6%, year-over-year, to 1.6 million, because of a reduction in the number of Affordable Care Act public exchange programs Anthem serves.

The number of Medicare plan users increased 7.4%, to 1.5 million.

Enrollment in the local group market increased 2.9%, to 16 million, and enrollment in the large-group market fell 0.7%, to 13 million.

The selling expense item, which includes the money Anthem spends on paying and supporting agents, brokers and other distributors, increased 0.5%, to $354 million.


A link to a recording of the conference call is available here.

Links to Anthem’s financial reports are available here.

—Read Anthem Execs Cautious About 2018 on ThinkAdvisor.

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