Anthem's Parent Says U.S. Employers Still Look Strong

For health insurance giant Elevance Health, the U.S. labor market still looks good.

Company CEO Gail Boudreaux discussed employers’ strength today during a conference call the company held to go over results for the second quarter with securities analysts.

“We’re really seeing employers still expanding their workforce and looking for more benefits to maintain the strength of their workforce,” Boudreaux said. “We haven’t seen any pullback yet in terms of our employer populations across any of the sized segments that we serve.”

Eventually, that could change, she said. But at this stage, employers’ concerns seem to be “more inflation-based than employment-based,” Boudreaux said. “And employers are still looking for strong solutions.”

What It Means

One of the factors the Federal Reserve Board considers when deciding what to do about interest rates is the job market.

If employers are still hiring, and still worrying about inflation, that might firm up Fed members’ support for moving ahead with efforts to push interest rates higher.

Many economists believe that increasing interest rates can help cool inflation by reducing the amount of money that individuals and businesses can use to pay for purchases.

The Name

Elevance Health is the new holding company name for Anthem. The Indianapolis-based company now provides or administers major medical coverage for more than 1 in every 7 U.S. residents.

The company changed its top-level corporate name in June and also realigned other brands. It’s still using the Anthem name for its health insurance operations.

“Our simplified brand architecture will streamline our brand portfolio, reduce complexities, and reinforce our evolution as an organization delivering solutions beyond health insurance,” Boudreaux said.

The company’s new stock symbol is “ELV.”

As of Wednesday, the SEC’s Edgar filing library was still listing Elevance filings under the old “ANTM” stock symbol.

Revenue and Cost Trends

Elevance reported in its earnings release that overall revenue had increased 17% in the second quarter and that Medicare Advantage plan enrollment increased 6.7%, to 1.9 million, in spite of predictions in the fall that expanding Medicare Advantage plan market share would be difficult.

But executives warned analysts that they now see COVID-19-related costs as a challenge that could last for some time.

Boudreaux said the country has been in the pandemic for several years.

“COVID is not going to zero,” she said. “Ultimately, as we think about our pricing in the commercial market, we’re not changing anything about the approach or philosophy that we’ve used historically. We’re always pricing to our forward view of costs.”

This year, Boudreaux said, COVID-19 costs hit an all-time high in January and February.

The Numbers

The second quarter ended June 30.

Elevance is reporting $1.8 billion in net income for the second quarter on $38 billion in revenue, compared with $1.7 billion in net income on $33 billion in revenue for the second quarter of 2021.

Elevance ended the quarter providing or administering health coverage for 47 million people, or 7.5% more than it was covering a year earlier.

Here’s what happened to the number of people covered by specific types of Elevance health coverage products between the second quarter of 2021 and the latest quarter:

• Individual commercial: 803,000 (up from 738,000)
• Medicare Advantage: 1.9 million (up from 1.8 million)
• Medicare supplement plans: 942,000 (up from 936,000)
• Self-funded employer plans: 27 million (up from 26 million)
• Fully insured employer plans: 4 million (up from 3.9 million)

The number of life and disability members rose 1%, to 4.8 million.

Enrollment in the company’s dental plans increased 0.2%, to 6.6 million, and enrollment in dental plans that Elevance administers, rather than insures, increased 6.1%, to 1.6 million.

Pictured: Gail Boudreaux. (Photo: Al Drago/Bloomberg)