Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  Anthem Inc    ANTM

News SummaryMost relevantAll newsSector newsTweets 

Anthem : Says ACA Payment Loss Could Cause 20% Premium Hike -- Update

share with twitter share with LinkedIn share with facebook
share via e-mail
04/26/2017 | 09:05pm CEST
By Anna Wilde Mathews and Austen Hufford 

Anthem Inc. said the loss of key federal payments that support Affordable Care Act plans could push premiums up 20% or more and lead it to pull back from the business, raising the stakes on the issue as House Speaker Paul Ryan said the money wasn't going to be included in an April spending bill.

The remarks by Mr. Ryan left the fate of the payments increasingly murky at a time when Anthem and other insurers are struggling to make decisions about their 2018 ACA plans. Speaking to analysts early Wednesday before Mr. Ryan's comments, Anthem said it would make initial rate filings that assume the continuation of the federal payments, which are provided to help low-income enrollees with health costs. But if the cost-sharing funding isn't guaranteed by early June, Anthem will need to make changes that could include further raising rates and cutting back in, or completely exiting, certain markets, said Joseph R. Swedish, the insurer's chief executive.

He said Anthem will continue to offer ACA plans only in markets that are on a "visible path toward sustainability," and currently "some markets are expected to be operating on a sustainable basis."

Mr. Swedish also said Anthem "has not ruled anyone in or out" in its effort to craft a new pharmacy-benefit management deal, appearing to cut against remarks by the insurer's current PBM, Express Scripts Holdings Inc. Express Scripts saw its shares drop sharply after it disclosed late Monday that it believes Anthem doesn't intend to renew its 10-year contract when it expires at the end of 2019. The two companies are dueling in court over their existing deal.

Mr. Swedish said the insurer still believes it should receive $3 billion more in savings each year on its PBM arrangement "at a minimum," and he said repeatedly that Anthem is still considering all possible pharmacy-benefit vendors for 2020 and beyond.

A spokesman for Express Scripts said Anthem officials "haven't wanted to talk about a contract extension."

Express Scripts Chief Executive Tim Wentworth told The Wall Street Journal in an interview that an Anthem executive called him about two weeks ago and said that Anthem's "executive team here has concluded 'we're going to go in another direction. I know it's probably surprising to you,'" said Mr. Wentworth. "And it was [surprising]."

Anthem's comments about the ACA plans and its pharmacy-benefit situation came as the insurer reported a first-quarter profit of $1.01 billion, or $3.73 a share, up from $703 million, or $2.63 a share, a year earlier. On an adjusted basis, earnings per share were $4.68. Revenue climbed 11% to $22.53 billion, and operating revenue rose 9.9% to $22.32 billion. Revenue growth was led by premium increases and by rising enrollment in segments including Medicaid and Medicare. Analysts surveyed by Thomson Reuters had forecast per-share earnings of $3.86 on operating revenue of $21.27 billion.

Mr. Swedish also said his company remains committed to its deal to acquire Cigna Corp. Anthem is appealing a court's antitrust ruling blocking the combination, but Cigna has said it wants out of the deal. Anthem and Cigna are currently suing one another, the culmination of months of tension between the merger partners.

Anthem's position on the ACA marketplaces is being closely watched because of its reach -- it is a major presence in 14 state exchanges, with nearly 1.6 million people enrolled in its ACA plans, 1.1 million of those bought through the marketplaces. Currently, 302 counties in states including Georgia, Missouri and Ohio have only Anthem plans available on their marketplaces, according to the Kaiser Family Foundation.

Around the country, exchange insurers have said they are finding it difficult to plot their 2018 strategy amid the uncertainty about the future of the ACA. House Republicans are now trying to move ahead with a revamped version of a major health overhaul.

Mr. Ryan's comments Wednesday about this month's spending bill -- in which he said of the ACA cost-sharing payments, "we're not doing that"--threw cold water on insurance-industry hopes that the federal money would soon be locked in by Congress.

Anthem's Mr. Swedish said that in addition to the potential rate increases tied to the loss of the cost-sharing payments, ACA-plan premiums are likely to be pushed up 4% to 5% next year based on the return of an insurer tax included in the ACA, which was suspended for 2017.

Anthem said that so far, claims costs for its ACA enrollees are running slightly higher than it had predicted this year, but the results are better than what Anthem saw at this point last year. The insurer said it is still expecting to be break-even or slightly better on its individual business in 2017.

Joseph Walker contributed to this article.

Write to Anna Wilde Mathews at [email protected] and Austen Hufford at [email protected]

share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on ANTHEM INC
04:53a ANTHEM'S RATE INCREASES REINFORCE WH : ObamaCare is Failing and Mainers Will Suf..
06/27DJANTHEM : Senate Health Bill Raises Uninsured by 22 Million in 2026 Compared to A..
06/26DJANTHEM : Says Senate Health Bill Will Bolster Individual Insurance Market -- Upd..
06/26 THE LATEST : White House questions report on Senate bill
06/26 ANTHEM'S RATE INCREASES REINFORCE WH : Obamacare is failing and mainers will suf..
06/26 ANTHEM : More Counties Left Without Insurance in Wake of Obamacare's Continued C..
06/23DJANTHEM : Agrees to $115 Million Settlement of Data Breach Lawsuit
06/23 ANTHEM : The Indianapolis Star James Briggs column
06/23 ANTHEM : It's gotta have 'heart'
06/22 ANTHEM : Rep. Bucshon Issues Statement on Anthem, MDwise Exiting Exchange
More news
Sector news : Managed Healthcare - NEC
06/21 Cigna's 2017 growth may include Medicare Advantage acquisitions
06/20 U.S. banks, corporations establish principles for cyber risk ratings firms
06/16DJCIGNA : Can Return to Medicare Advantage, Prescription-Drug Plans -- Update
06/16DJCIGNA : Can Return to Medicare Prescription-Drug Plans
06/13DJANTHEM : Boss Faces Tough Choices in Health-Care Debate
More sector news : Managed Healthcare - NEC
News from SeekingAlpha
06/27 Stocks fall to day's lows as Senate delays health care vote
06/27 CBO evaluates Senate health bill
06/26 7 Inexpensive Stocks With Positive Earnings Momentum
06/22 Changes aplenty in GOP's healthcare bill, but not a radical departure from AC..
06/22 GOP healthcare plan long on repeals
Financials ($)
Sales 2017 88 515 M
EBIT 2017 4 913 M
Net income 2017 2 827 M
Debt 2017 -
Yield 2017 1,40%
P/E ratio 2017 17,80
P/E ratio 2018 15,12
Capi. / Sales 2017 0,56x
Capi. / Sales 2018 0,53x
Capitalization 49 661 M
More Financials
Duration : Period :
Anthem Inc Technical Analysis Chart | ANTM | US0367521038 | 4-Traders
Full-screen chart
Technical analysis trends ANTHEM INC
Short TermMid-TermLong Term
Technical analysis
Income Statement Evolution
More Financials
Mean consensus OUTPERFORM
Number of Analysts 20
Average target price 196 $
Spread / Average Target 4,8%
Consensus details
EPS Revisions
More Estimates Revisions
Joseph R. Swedish Chairman, President & Chief Executive Officer
John E. Gallina Chief Financial Officer & Executive Vice President
Craig E. Samitt Chief Clinical Officer & Executive Vice President
Ramiro G. Peru Independent Director
Julie Anne Hill Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
ANTHEM INC30.35%49 661
AETNA INC21.92%50 150
HUMANA INC15.06%34 213
CENTENE CORP43.36%13 956
More Results