Anthem Enrollments Drop But Profits Surge

The strong economy contributed to health insurer Anthem losing Medicaid enrollees during the second quarter, company executives said Wednesday.

The fall in Medicaid enrollment, as well as in the Obamacare market, caused enrollment to fall by 888,000 people compared with the same time last year.

Anthem executives said the company expects to gain more enrollees due to the expansion of the Medicaid program in Virginia, which projections show will enroll 400,000 more people on the program that begins Jan. 1, 2019. Health insurance companies receive government fees to help offer coverage for people on Medicaid, a program for low-income people as well as children, pregnant women, and people with disabilities.

People no longer qualify for Medicaid after they pass an income threshold of roughly $16,000 a year, and if they went from being unemployed to employed then they also may have gained a job that offers private medical coverage.

Anthem made up for some of the offsets in enrollment by growth in the Medicare program, which increased by 254,00 members during the second quarter. Gail Boudreaux, the company's CEO, said on a call with investors that Anthem plans to continue investing in this area.

Despite the drop in enrollment, the investment in Medicare helped Anthem profits increase by 23 percent, to $1 billion, compared to $855 million at the same time last year. The company's total enrollment across all its different programs is 39.5 million.

Anthem was one of several insurers to leave certain Obamacare markets for 2019 as it faced uncertainty from the Trump administration and Republicans in Congress who sought to overhaul the healthcare law. Its total enrollment fell by roughly 888,000 members in part because of this change. Company executives said that it was likely to remain in the same states but perhaps expand into additional counties.

The company, part of Blue Cross Blue Shield, sells Obamacare plans in 14 states.

"We are not looking to rescale the business," Boudreaux said. "We are pleased with the performance."