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Gail Boudreaux, president and chief executive officer of Anthem Inc., speaks during a coronavirus briefing with health insurers in the Roosevelt Room of the White House in Washington, D.C., U.S., on Tuesday, March 10, 2020. The window for fully containing the coronavirus has passed in some parts of the U.S. and the White House will roll out plans later Tuesday to mitigate its impact. Photographer: Al Drago/Bloomberg

Life Health > Health Insurance > Medicare Planning

Anthem Posts 30% Increase in Medicare Advantage Enrollees

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What You Need to Know

  • In the fourth quarter of 2021, both revenue and net income were up.
  • The enrollees who come in through the ACA public exchange system stay enrolled longer these days.
  • Hospitalization related to the COVID-19 pandemic may be running a little higher than it was a year ago.

Executives at Anthem say the Medicare Advantage market looks great to them.

Humana suggested earlier this month that, in the communities it serves, concern about aggressive price competition had caused it to let Medicare Advantage plan enrollment growth slow.

But executives from UnitedHealth said, when that company posted its earnings for the fourth quarter of 2021, that the level of competition seemed to be about the same as it’s been for the past few years.

Gail Boudreaux, Anthem’s CEO, gave a similar assessment today, when Anthem released its fourth-quarter results.

Anthem generated $139 billion in revenue in 2021 and pays for health care for more than 1 in 8 U.S. residents. But it took a cautious approach to entering the Medicare Advantage market and how has just a 7% share there.

The Medicare Advantage annual enrollment period, or AEP, for 2022 coverage ran from Oct. 15 through Dec. 7.

“We felt we had a very strong AEP,” Boudreaux said. “We’re expecting double-digit growth … I think there was a very consistent competitive environment.”

Boudreaux also talked about “churn,” or movements of enrollees from one Medicare Advantage plan to another.

“We’re not seeing anything significantly different than we’ve seen in the past,” Boudreaux said. “It’s been a competitive market. It remains a competitive market.”

Boudreaux talked about the Medicare Advantage market during a conference call Anthem held to discuss its fourth-quarter results with securities analysts.

Anthem said ended the year with about 30% more Medicare Advantage plan enrollees than it had at the end of 2020.

What That Means for Agents

The Medicare Advantage plan market gives insurers and managed care companies a chance to offer plans that look to the enrollees like alternatives to the traditional Medicare program. The plans now cover about 29 million of the 64 million people who have Medicare coverage.

Consistent growth in Medicare Advantage plan sales in recent years has made that market look like a haven from the effects of political battles on the Affordable Care Act public exchange plan market and the effects of low interest rates and accounting rule changes on the life insurance and annuity markets.

The remarks by UnitedHealth executives and Boudreaux suggest that the Medicare Advantage market lifeboat may be hard to get aboard, but about as buoyant as ever.

Other Anthem Observations

Here are some other things Anthem executives said during the earnings call.

Medicare Advantage plan benefits: Anthem sees taking advantage of new Medicare program flexibility and adding benefits related to the “social determinants of care,” such as transportation and meal delivery, as a good way to attract customers.

The Affordable Care Act public exchange system: Anthem likes the exchange plan market and believes that it’s capturing enrollees from other carriers in that market. Morgan Kendrick, president of Anthem’s commercial business, said retention levels for enrollees through the exchange system are higher than they were in the past.

“In the beginning of the ACA, it wasn’t a sticky market,” Kendrick said. “There was lots of churn every year. We’re seeing that very differently now.”

COVID-19 is still here. Pandemic-related decreases in the cost of covering ordinary health care continue to offset increases related to covering efforts to prevent, detect and treat COVID-19, executives said.

John Gallina, the chief financial officer, said that, although hospitalization rates for people with the COVID-19 omicron variant have been lower than for other variants, there are so many people with the omicron variant that the number of people hospitalized is about the same as it was a year ago and might be a little higher.

The Results

For the fourth quarter of 2021, which ended Dec. 31, Anthem is reporting $1.1 billion in net income on $37 billion revenue, up from $551 million in net income on $32 billion in revenue for the fourth quarter of 2020.Medicare Advantage plan enrollment was up 31%.

Anthem ended 2021 providing or administering health coverage for 45 million people, 5.7% more than it was covering a year earlier.

Here’s what happened to the number of people covered by specific types of Anthem health coverage products between the fourth quarter of 2020 and the fourth quarter of 2021:

  • Individual Commercial: 759,000 (up from 680,000)
  • Medicare Advantage: 1.9 million (up from 1.4 million)
  • Medicare Supplement: 952,000 (up from 933,000)
  • Self-Funded Employer Plans: 19.4 million (down from 19.6 million)
  • Fully Insured Employer Plans: 4 million (up from 3.8 million)

The number of life and disability members fell to 4.8 million, from 5.1 million.

Enrollment in the company’s dental plans increased 4.5%, to 6.7 million, and enrollment in dental plans that Anthem administers, rather than insures, increased 13%, to 1.5 million.

Pictured: Anthem CEO Gail Boudreaux (Photo: Al Drago/Bloomberg)