ANTHEM, INC. – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(In Millions, Except Per Share Data or as Otherwise Stated Herein)
This Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") should be read in conjunction with the accompanying
consolidated financial statements and notes, our consolidated financial
statements and notes as of and for the year ended December 31, 2020 and the MD&A
included in our 2020 Annual Report on Form 10-K. References to the terms "we,"
"our," "us," or "Anthem" used throughout this MD&A refer to Anthem, Inc., an
Indiana corporation, and unless the context otherwise requires, its direct and
indirect subsidiaries. References to the "states" include the District of
Columbia and Puerto Rico, unless the context otherwise requires.
Results of operations, cost of care trends, investment yields and other measures
for the three and nine months ended September 30, 2021 are not necessarily
indicative of the results and trends that may be expected for the full year
ending December 31, 2021, or any other period.
Overview
We are one of the largest health benefits companies in the United States in
terms of medical membership, serving approximately 45 medical members through
our affiliated health plans as of September 30, 2021. We are an independent
licensee of the Blue Cross and Blue Shield Association ("BCBSA"), an association
of independent health benefit plans. We serve our members as the Blue Cross
licensee for California and as the Blue Cross and Blue Shield ("BCBS") licensee
for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri
(excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York
(in the New York City metropolitan area and upstate New York), Ohio, Virginia
(excluding the Northern Virginia suburbs of Washington, D.C.) and Wisconsin. In
a majority of these service areas, we do business as Anthem Blue Cross, Anthem
Blue Cross and Blue Shield, and Empire Blue Cross Blue Shield or Empire Blue
Cross. We also conduct business through arrangements with other BCBS licensees
as well as other strategic partners. Through our subsidiaries, we also serve
customers in numerous states and Puerto Rico as AIM Specialty Health,
Amerigroup, Aspire Health, Beacon, CareMore, Freedom Health, HealthLink,
HealthSun, MMM, Optimum HealthCare, Simply Healthcare, and/or UniCare. Pharmacy
benefits management ("PBM") services are offered through our IngenioRx
subsidiary. We are licensed to conduct insurance operations in all fifty states,
the District of Columbia and Puerto Rico through our subsidiaries.
For additional information about our organization, see Part I, Item 1,
"Business" and Part II, Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," included in our 2020 Annual
Report on Form 10-K. Additional information on our segments can be found in this
MD&A and in Note 15, "Segment Information" of the Notes to Consolidated
Financial Statements included in Part I, Item 1 of this Form 10-Q.
COVID-19
The COVID-19 pandemic continues to impact the global economy, cause market
instability and put pressure on the healthcare system, and it has impacted, and
will likely continue to impact, our membership, our benefit expense and our
members' behavior, including how members access healthcare. We continue to
assist our customers, providers, members and communities in addressing the
effects of the COVID-19 pandemic, including by providing expanded benefit
coverage for COVID-19 diagnostic tests, treatment and vaccine administration and
taking steps to increase vaccinations by enabling, educating, and encouraging
vaccine acceptance among our members as well as in the communities in which we
operate.
COVID-19 care, testing and vaccine administration, and the impact of new
COVID-19 variants, have resulted in increased medical costs for us in 2021.
Since June 30, 2020, our Medicaid membership has grown as a result of the
temporary suspension of eligibility recertification in response to the COVID-19
pandemic, which will remain suspended at least until the first quarter of 2022.
Our Commercial fee-based membership has decreased in this same period due to
in-group attrition likely attributable to the COVID-19 pandemic. See "Business
Trends - Medical Cost Trends" below for a discussion of the impact of COVID-19
on our healthcare costs.
The COVID-19 pandemic continues to evolve and the full extent of its impact will
depend on future developments, which are highly uncertain and cannot be
predicted at this time. We will continue to monitor the COVID-19 pandemic as
well
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as resulting legislative and regulatory changes to manage our response and
assess and mitigate potential adverse impacts to our business. For additional
discussion related to the COVID-19 pandemic and our risk factors, see Part I,
Item 1, "Business-COVID-19", Part I, Item 1A, "Risk Factors" and Part II, Item
7, "Management's Discussion and Analysis of Financial Condition and Results of
Operations-COVID-19" included in our 2020 Annual Report on Form 10-K.
Business Trends
The Patient Protection and Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010, as amended (collectively, the "ACA") has changed and
may continue to make broad-based changes to the U.S. healthcare system. In June
2021, the U.S. Supreme Court issued its opinion and dismissed the latest legal
challenge to the constitutionality of the ACA, leaving the law intact. We expect
the ACA will continue to impact our business model and strategy. In 2020, we
made the decision to modestly expand our participation in the Individual
ACA-compliant market for 2021. Our strategy has been, and will continue to be,
to only participate in rating regions where we have an appropriate level of
confidence that these markets are on a path toward sustainability, including,
but not limited to, factors such as expected financial performance, regulatory
environment, and underlying market characteristics. We currently offer
Individual ACA-compliant products in 103 of the 143 rating regions in which we
operate. In addition, the continuing growth in our government-sponsored business
exposes us to increased regulatory oversight.
Our IngenioRx subsidiary markets and offers PBM services to our affiliated
health plan customers throughout the country, as well as to customers outside of
the health plans we own. Our comprehensive PBM services portfolio includes
services such as formulary management, pharmacy networks, a prescription drug
database, member services and mail order capabilities. IngenioRx delegates
certain PBM administrative functions, such as claims processing and prescription
fulfillment, to CaremarkPCS Health, L.L.C., which is a subsidiary of CVS Health
Corporation, pursuant to a five-year agreement. With IngenioRx, we retain the
responsibilities for clinical and formulary strategy and development, member and
employer experiences, operations, sales, marketing, account management and
retail network strategy.
Pricing Trends: We strive to price our healthcare benefit products consistent
with anticipated underlying medical cost trends. We continue to closely monitor
the COVID-19 pandemic (including new COVID-19 variants, which may be more
contagious or severe, or less responsive to treatment or vaccines) and the
impacts it may have on our pricing, such as surges in COVID-19 related
hospitalizations, infection rates, the cost of COVID-19 vaccines and the return
of non-COVID-19 healthcare utilization to our estimate of normal levels, based
on historical utilization patterns. We frequently make adjustments to respond to
legislative and regulatory changes as well as pricing and other actions taken by
existing competitors and new market entrants. Product pricing in our Commercial
& Specialty Business segment, including our Individual and Small Group lines of
business, remains competitive. Revenues from the Medicare and Medicaid programs
are dependent, in whole or in part, upon annual funding from the federal
government and/or applicable state governments. The ACA imposed an annual Health
Insurance Provider Fee ("HIP Fee") on health insurers that write certain types
of health insurance on U.S. risks. When applicable, we priced our affected
products to cover the impact of the HIP Fee, including during 2020. The HIP Fee
has been permanently repealed beginning in 2021.
Medical Cost Trends: Our medical cost trends are primarily driven by increases
in the utilization of services across all provider types and the unit cost
increases of these services. We work to mitigate these trends through various
medical management programs such as utilization management, condition
management, program integrity and specialty pharmacy management, as well as
benefit design changes. There are many drivers of medical cost trends that can
cause variance from our estimates, such as changes in the level and mix of
services utilized, regulatory changes, aging of the population, health status
and other demographic characteristics of our members, epidemics, pandemics,
advances in medical technology, new high cost prescription drugs, and healthcare
provider or member fraud.
The COVID-19 pandemic initially caused a decrease in utilization of non-COVID-19
health services, which decreased our claim costs in 2020. Over the course of the
first half of 2021, our non-COVID-19 healthcare utilization experience gradually
increased toward normalized levels, while COVID-19 related healthcare expenses
declined and COVID-19 vaccination administration costs increased. During the
third quarter of 2021, the COVID-19 Delta variant caused a significant increase
in COVID-19 related healthcare utilization as a result of increased testing,
treatment, and hospitalization costs, which was partially offset by a reduction
in non-COVID-19 healthcare utilization. The reduction in non-COVID-19 healthcare
utilization was particularly notable in the inpatient setting, as some regions
limited elective surgeries in order to preserve limited resources to treat
patients hospitalized with COVID-19.
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Our expenses in 2020 and the first nine months of 2021 included additional costs
to cover COVID-19 related testing, treatment and vaccine administration. In the
fourth quarter of 2021, we expect COVID-19 related healthcare expenses to
decline from the surge experienced during the third quarter of 2021 related to
the Delta variant and utilization of non-COVID-19 healthcare services to recover
toward the levels experienced in 2021 prior to the Delta surge. We anticipate
additional COVID-19 vaccination costs as young children become eligible for the
vaccine and more adults choose to receive the vaccine and booster doses. Further
increases and pent-up demand in the utilization of non-COVID-19 healthcare
services, as well as increases in acuity associated with deferred services and
the long-term health complications of COVID-19, may increase our claim costs in
the future and affect our medical cost trends. We continue to monitor the
COVID-19 pandemic and its impacts on our business, financial condition, results
of operations and medical cost trends.
For additional discussion regarding business trends, see Part I, Item 1,
"Business" included in our 2020 Annual Report on Form 10-K.
Regulatory Trends and Uncertainties
Federal and state governments have enacted, and may continue to enact,
legislation and regulations in response to the COVID-19 pandemic that have had,
and we expect will continue to have, a significant impact on healthcare
benefits, consumer eligibility for public programs and our cash flows for all of
our lines of business. These actions, which are or have been in effect for
various durations, provide, among other things:
•waivers on cost-sharing on COVID-19 testing, treatment, vaccines and related
services;
•reforms, including waiving Medicare originating site restrictions for qualified
providers providing telehealth services;
•financial support to healthcare providers, including expansion of the Medicare
accelerated payment program to all providers receiving Medicare payments;
•mandated expansion of premium payment terms, including the time period for
which claims can be denied for lack of payment; and
•mandates related to prior authorizations and payment levels to providers,
additional consumer enrollment windows and an increased ability to provide
telehealth services.
The Consolidated Appropriations Act of 2021, which was enacted in December 2020
(the "Appropriations Act"), contains a number of provisions that may have a
material effect upon our business, including procedures and coverage
requirements related to surprise medical bills and new mandates for continuity
of care for certain patients, price comparison tools, disclosure of broker
compensation and reporting on pharmacy benefits and drug costs. The health
plan-related requirements of the Appropriations Act have varying effective dates
beginning as early as December 2021, some of which have been extended since the
enactment of the Appropriations Act.
The American Rescue Plan Act of 2021, (the "Rescue Plan"), which was enacted in
March 2021, contains several health-related provisions that have impacted our
business, including expansion of premium tax credits for our Individual exchange
business and full subsidization of the Consolidated Omnibus Budget
Reconciliation Act ("COBRA") continuation coverage for those who were
involuntarily terminated or had their work hours reduced. The Rescue Plan's
premium tax provisions became effective in January 2021, while the COBRA premium
subsidization extended from April through September 2021.
The ACA presented us with new growth opportunities, but also introduced new
risks, regulatory challenges and uncertainties, and required changes in the way
products are designed, underwritten, priced, distributed and administered.
Changes to our business environment are likely to continue as elected officials
at the national and state levels continue to enact, and both elected officials
and candidates for election continue to propose, significant modifications to
existing laws and regulations, including changes to taxes and fees. We will
continue to evaluate the impact of the ACA as any further developments or
judicial rulings occur.
For additional discussion regarding regulatory trends and uncertainties and risk
factors, see Part I, Item 1, "Business - Regulation", Part I, Item 1A, "Risk
Factors", and the "Regulatory Trends and Uncertainties" section of Part II, Item
7, "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in our 2020 Annual Report on Form 10-K.
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Other Significant Items
Business and Operational Matters
On June 29, 2021, we completed our acquisition of MMM Holdings, LLC ("MMM") and
its Medicare Advantage plan, Medicaid plan and other affiliated companies from
InnovaCare Health, L.P. MMM is a Puerto Rico-based integrated healthcare
organization and seeks to provide its Medicare Advantage and Medicaid members
with a whole health experience through its network of specialized clinics and
wholly owned independent physician associations. This acquisition aligns with
our vision to be an innovative, valuable and inclusive healthcare partner by
providing care management programs that improve the lives of the people we
serve.
On April 28, 2021, we completed our acquisition of myNEXUS, Inc. ("myNEXUS")
from WindRose Health Investors. myNEXUS is a comprehensive home-based nursing
management company for payors and, at the time of acquisition, delivered
integrated clinical support services for Medicare Advantage members across
twenty states. This acquisition aligns with our strategy to manage integrated,
whole person multi-site care and support by providing national, large-scale
expertise to manage nursing services in the home and facilitate transitions of
care.
On February 28, 2020, we completed our acquisition of Beacon Health Options,
Inc. ("Beacon"), the largest independently held behavioral health organization
in the country. At the time of acquisition, Beacon served more than thirty-four
million individuals across all fifty states. This acquisition aligned with our
strategy to diversify into health services and deliver both integrated solutions
and care delivery models that personalize care for people with complex and
chronic conditions.
For additional information, see Note 3, "Business Acquisitions," of the Notes to
Consolidated Financial Statements included in Part 1, Item 1 of this Form 10-Q.
In 2020, we introduced enterprise-wide initiatives to optimize our business, and
as a result, recorded a charge of $653 in selling, general and administrative
expenses for the year ended December 31, 2020. We believe these initiatives
largely represent the next step forward in our progression towards becoming a
more agile organization, including process automation and a reduction in our
office space footprint. For additional information see Note 4, "Business
Optimization Initiatives" and Note 16, "Leases" of the Notes to Consolidated
Financial Statements included in Part I, Item 1 of this Form 10-Q.
Litigation Matters
In the consolidated multi-district proceeding in the United States District
Court for the Northern District of Alabama (the "Court") captioned In re Blue
Cross Blue Shield Antitrust Litigation ("BCBSA Litigation"), the BCBSA and Blue
Cross and/or Blue Shield licensees, including us (the "Blue plans"), have
approved a settlement agreement and release (the "Subscriber Settlement
Agreement") with the plaintiffs representing a putative nationwide class of
health plan subscribers. Generally, the lawsuits in the BCBSA Litigation
challenge elements of the licensing agreements between the BCBSA and the
independently owned and operated Blue plans. The cases were brought by two
putative nationwide classes of plaintiffs, health plan subscribers and
providers, and the Subscriber Settlement Agreement applies only to the putative
subscriber class. No settlement agreement has been reached with the provider
plaintiffs at this time, and the defendants continue to contest the consolidated
cases brought by the provider plaintiffs.
If approved by the Court, the Subscriber Settlement Agreement will require the
defendants to make a monetary settlement payment, our portion of which is
estimated to be $594, and will include certain non-monetary terms. As of
September 30, 2021, the liability balance accrued for our estimated remaining
payment obligation was $507, net of payments made. All terms of the Subscriber
Settlement Agreement are subject to approval by the Court before they become
effective. For additional information regarding the BCBSA Litigation, see Note
11, "Commitments and Contingencies - Litigation and Regulatory Proceedings -
Blue Cross Blue Shield Antitrust Litigation," of the Notes to Consolidated
Financial Statements included in Part I, Item 1 of this Form 10-Q.
In January 2019, we exercised our contractual right to terminate our PBM
agreement (the "ESI PBM Agreement") with Express Scripts, Inc. ("Express
Scripts"). We completed the transition of our members from Express Scripts to
IngenioRx by January 1, 2020. Notwithstanding our termination of the ESI PBM
Agreement, the litigation between us and Express Scripts regarding the ESI PBM
Agreement continues. For additional information regarding this lawsuit, see Note
11, "Commitments
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and Contingencies - Litigation and Regulatory Proceedings - Express Scripts,
Inc. Pharmacy Benefit Management Litigation," of the Notes to Consolidated
Financial Statements included in Part I, Item 1 of this Form 10-Q.
Selected Operating Performance
For the twelve months ended September 30, 2021, total medical membership
increased 2.4, or 5.7%. Our medical membership grew in both our Government
Business and Commercial & Specialty Business segments. The increase in our
Government Business membership was primarily driven by increases in our Medicaid
membership, including organic growth resulting from the temporary suspension of
eligibility recertification during the COVID-19 pandemic, which will remain
suspended at least until the first quarter of 2022, our acquisition of MMM on
June 29, 2021, the launch of our HealthyBlue managed care alliance in North
Carolina and organic growth in our Medicare Advantage business. Commercial &
Specialty Business membership growth included increases in Group risk-based
membership resulting from sales exceeding lapses and increases in Individual
membership due to the ACA expansion in 2021, partially offset by declines in
Group fee-based membership due to in-group attrition likely resulting from the
COVID-19 pandemic.
Operating revenue for the three months ended September 30, 2021 was $35,548, an
increase of $4,899, or 16.0%, from the three months ended September 30, 2020.
The increase in operating revenue for the three months ended September 30, 2021
compared to 2020 was primarily driven by higher premium revenue due mainly to
membership growth in our Government Business segment, including related to our
acquisition of MMM, and increased product revenue in our IngenioRx segment.
These increases were partially offset by the impact of lower premium revenue
associated with the repeal of the HIP Fee for 2021. Operating revenue for the
nine months ended September 30, 2021 was $100,925, an increase of $11,650, or
13.0%, from the nine months ended September 30, 2020. The increase in operating
revenue for the nine months ended September 30, 2021 compared to 2020 was
primarily driven by higher premium revenue due mainly to membership growth in
our Government Business segment, including related to the acquisition of MMM,
increased product revenue in our IngenioRx segment and premium rate increases in
our Commercial & Specialty Business segment. These increases were partially
offset by the impact of lower premium revenue associated with the repeal of the
HIP Fee for 2021.
Net income for the three months ended September 30, 2021 was $1,502, an increase
of $1,280, or 576.6%, from the three months ended September 30, 2020. The
increase in net income for the three months ended September 30, 2021 was
primarily due to increased operating gain in all of our business segments,
primarily the result of the absence of charges in 2021 for our business
optimization initiatives and the BCBSA litigation accrual recognized during the
third quarter of 2020. Net income for the nine months ended September 30, 2021
was $4,970, an increase of $949, or 23.6% from the nine months ended September
30, 2020. The increase in net income for the nine months ended September 30,
2021 was primarily due to increased operating gain in all of our business
segments, primarily due to the absence of charges in 2021 for our business
optimization initiatives and the BCBSA litigation accrual recognized during the
third quarter of 2020. These operating gain increases were partially offset by
increased COVID-19 and non-COVID-19 healthcare costs.
Our fully-diluted shareholders' earnings per share ("EPS") was $6.13 for the
three months ended September 30, 2021, which represented a 604.6% increase from
EPS of $0.87 for the three months ended September 30, 2020. Our fully-diluted
shareholders' EPS was $20.09 for the nine months ended September 30, 2021, which
represented a 27.6% increase from fully-diluted EPS of $15.75 for the nine
months ended September 30, 2020. The increase in EPS for the three and nine
months ended September 30, 2021 compared to 2020 resulted primarily from the
increase in net income, as well as lower shares outstanding in 2021.
Operating cash flow for the nine months ended September 30, 2021 and 2020 was
$6,692 and $6,875, respectively. The decrease in operating cash flow was
primarily driven by the timing of working capital changes, partially offset by
higher net income in 2021.
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Membership

In the first quarter of 2021, we updated our medical membership reporting to
better align with how we view our business. Our medical membership now includes
the following customer types: Individual, Group risk-based, Group fee-based,
BlueCard®, Medicare, Medicaid and our Federal Employees Health Benefits ("FEHB")
Program. BCBS-branded business generally refers to members in our service areas
licensed by the BCBSA. Non-BCBS-branded business refers to members in our
non-BCBS-branded Amerigroup, Freedom Health, HealthSun, MMM, Optimum HealthCare
and Simply Healthcare plans, as well as HealthLink and UniCare members. In
addition to the above medical membership, we also serve customers who purchase
one or more of our other products or services that are often ancillary to our
health business.
•Individual consists of individual customers under age 65 and their covered
dependents. Individual policies are generally sold through independent agents
and brokers, retail partnerships, our in-house sales force or via the exchanges.
Individual business is sold on a risked-based basis. We offer on-exchange
products through public exchanges and off-exchange products. Federal premium
subsidies are available only for certain public exchange Individual
products. Unsubsidized Individual customers are generally more sensitive to
product pricing and, to a lesser extent, the configuration of the network and
the efficiency of administration. Customer turnover is generally higher with
Individual as compared to Group risk-based business.
•Group risk-based consists of employer customers who purchase products on a
full-risk basis, which are products for which we charge a premium and indemnify
our policyholders against costs for health benefits. Group risk-based accounts
include Local Group customers and National Accounts. Local Group consists of
those employer customers with less than 5% of eligible employees located outside
of the headquarter state, as well as customers with more than 5% of eligible
employees located outside of the headquarter state with up to 5,000 eligible
employees. In addition, Local Group includes Student Health members. National
Accounts generally consist of multi-state employer groups primarily
headquartered in an Anthem service area with at least 5% of the eligible
employees located outside of the headquarter state and with more than 5,000
eligible employees. Some exceptions are allowed based on broker and consultant
relationships. Group risk-based accounts are generally sold through brokers or
consultants who work with industry specialists from our in-house sales force and
are offered both on and off the public exchanges.
•Group fee-based customers represent employer groups, Local Group, including
UniCare members, and National Accounts, who purchase fee-based products and
elect to retain most or all of the financial risk associated with their
employees' healthcare costs. Some fee-based customers choose to purchase stop
loss coverage to limit their retained risk. Group fee-based accounts are
generally sold through independent brokers or consultants retained by the
customer working with our in-house sales force.
•BlueCard® host customers represent enrollees of Blue Cross and/or Blue Shield
plans not owned by Anthem who receive healthcare services in our BCBSA licensed
markets. BlueCard® membership consists of estimated host members using the
national BlueCard® program. Host members are generally members who reside in or
travel to a state in which an Anthem subsidiary is the Blue Cross and/or Blue
Shield licensee and who are covered under an employer-sponsored health plan
issued by a non-Anthem controlled BCBSA licensee (the "home Blue plan"). We
perform certain functions, including claims pricing and administration, for
BlueCard® members, for which we receive administrative fees from the BlueCard®
members' home Blue plans. Other administrative functions, including maintenance
of enrollment information and customer service, are performed by the home Blue
plan. Host members are computed using, among other things, the average number of
BlueCard® claims received per month.
•Medicare customers are Medicare-eligible individual members age 65 and over who
have enrolled in Medicare Supplement plans; Medicare Advantage, including
Special Needs Plans ("SNPs"), also known as Medicare Advantage SNPs; Medicare
Part D; and dual-eligible programs through Medicare-Medicaid Plans ("MMPs").
Medicare Supplement plans typically pay the difference between healthcare costs
incurred by a beneficiary and amounts paid by Medicare. Medicare Advantage plans
provide Medicare beneficiaries with a managed care alternative to traditional
Medicare and often include a Medicare Part D benefit. In addition, our Medicare
Advantage SNPs provide tailored benefits to special needs individuals who are
institutionalized or have severe or disabling chronic conditions and to
dual-eligible customers, who are low-income seniors and persons under age 65
with disabilities. Medicare Advantage SNPs are coordinated care plans
specifically designed to provide targeted care, covering all the healthcare
services considered medically necessary for members and often providing
professional care coordination services, with personal guidance and programs
that help members maintain their health. Medicare Advantage membership also
includes Medicare Advantage members in our Group Retiree Solutions business who
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are retired members of Commercial accounts or retired members of groups who are
not affiliated with our Commercial accounts who have selected a Medicare
Advantage product through us. Medicare Part D offers a prescription drug plan to
Medicare and MMP beneficiaries. MMP, which was established as a result of the
passage of the ACA, is a demonstration program focused on serving members who
are dually eligible for Medicaid and Medicare. Medicare Supplement and Medicare
Advantage products are marketed in the same manner, primarily through
independent agents and brokers.
•Medicaid membership represents eligible members who receive healthcare benefits
through publicly funded healthcare programs, including Medicaid, ACA-related
Medicaid expansion programs, Temporary Assistance for Needy Families, programs
for seniors and people with disabilities, Children's Health Insurance Programs,
and specialty programs such as those focused on long-term services and support,
HIV/AIDS, foster care, behavioral health and/or substance abuse disorders, and
intellectual disabilities or developmental disabilities, among others.
•FEHB members consist of United States government employees and their dependents
within our geographic markets through our participation in the national contract
between the BCBSA and the U.S. Office of Personnel Management.
The following table presents our medical membership by reportable segment and
customer type as of September 30, 2021 and 2020. Also included below is other
membership by product. The medical membership and other membership data
presented are unaudited and in certain instances include estimates of the number
of members represented by each contract at the end of the period.

                                                 September 30
(In thousands)                             2021                2020        Change      % Change
Medical Membership
Commercial & Specialty Business:
Individual                                  769                  701            68        9.7  %
Group Risk-Based                          3,946                3,774           172        4.6  %
Commercial Risk-Based                     4,715                4,475           240        5.4  %
BlueCard®                                 6,166                6,106            60        1.0  %
Group Fee-Based                          19,370               19,508         (138)       (0.7) %
Commercial Fee-Based                     25,536               25,614         (78)        (0.3) %
Total Commercial & Specialty Business    30,251               30,089         162          0.5  %
Government Business:
Medicare Advantage                        1,853                1,416           437       30.9  %
Medicare Supplement                         947                  933            14        1.5  %
Total Medicare                            2,800                2,349         451         19.2  %
Medicaid                                 10,391                8,569         1,822       21.3  %
Federal Employees Health Benefits         1,629                1,618            11        0.7  %
Total Government Business                14,820               12,536         2,284       18.2  %
Total Medical Membership                 45,071               42,625         2,446        5.7  %
Other Membership
Life and Disability Members               4,695                5,029        (334)        (6.6) %
Dental Members                            6,637                6,356         281          4.4  %
Dental Administration Members             1,486                1,315         171         13.0  %
Vision Members                            7,974                7,487         487          6.5  %
Medicare Part D Standalone Members          438                  405          33          8.1  %

Medical Membership
Total medical membership increased primarily due to growth in our Government
Business, which was driven primarily by increases in our Medicaid membership,
including organic growth resulting from the temporary suspension of eligibility

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recertification during the COVID-19 pandemic, growth resulting from our
acquisition of MMM on June 29, 2021 and the launch of our HealthyBlue managed
care alliance in North Carolina. Our Medicare Advantage membership also
increased due to organic growth. Increases in Group risked-based membership
resulting from sales exceeding lapses and increases in Individual membership due
to our ACA expansion in 2021 also contributed to overall membership increases.
Declines in our Group fee-based membership due to in-group attrition likely
attributable to the COVID-19 pandemic partially offset the increases in our
medical membership.
Other Membership
Our other membership can be impacted by changes in our medical membership, as
our medical members often purchase our other products that are ancillary to our
health business. Life and disability membership decreased primarily due to the
loss of a Group risked-based account and membership decreases in our Group
fee-based business. Dental membership increased primarily due to higher sales in
our Individual and Group risk-based accounts and growth in our FEHB program.
Dental administration membership increased due to growth in our FEHB program.
Vision membership increased as a result of growth in our Medicare business.
Consolidated Results of Operations
Our consolidated summarized results of operations and other financial
information for the three and nine months ended September 30, 2021 and 2020 are
as follows: