Anthem’s PBM And Medicare Advantage Drive Growth Ahead Of Coronavirus Impact

Health insurer Anthem is increasing membership thanks to seniors signing up to Medicare Advantage while benefitting financially from the launch of its own pharmacy benefit management company, IngenioRx.

Anthem, which operates Blue Cross and Blue Shield plans in 14 states, said its health plan membership rose 3% or by more than 1 million members to 42.1 million total members as of March 31, 2020 compared to last year’s first quarter. Anthem saw its biggest membership gain in the quarter from Medicare Advantage, which rose 17% to 1.3 million health plan members compared to the first quarter of 2019. Anthem revenues rose 20% to $29.6 billion.

Anthem reported $1.5 billion in net income, which was down slightly compared to the first quarter of last year. The company said it saw a $349 million “operating gain” from IngenioRx, the PBM Anthem launched last year began rolling out after ending a longtime relationship with Cigna’s Express Scripts PBM.

The membership figures come as cases of the coronavirus strain COVID-19 surged past 1 million in the U.S. in what will eventually impact the health benefits of Anthem members and potential new enrollment for the nation’s second-largest health insurer.

Anthem, however, said it’s too early to tell how its health plan businesses will be impacted. Companies hit hard by stay at home orders to prevent the spread of COVID-19 have been shedding workers who may lose their health benefits in the future.

“We are really in the early stages of understanding the costs (of COVID-19),” Anthem chief executive officer Gail Boudreaux told analysts Wednesday morning on a call to discuss earnings.

Anthem executives expect to see enrollment increases in Medicaid plans the insurer administers for states as well as its individual plans under the Affordable Care Act known as Obamacare. Boudreaux said the company is prepared to meet the needs of future customers given its large portfolio of commercial and government health plan offerings.

“We have a much more diversified business than we historically had,” Boudreaux said.