“Thus far, we have seen a slight uptick in the Medicaid enrollment as a result of states temporarily suspending reverification efforts and limited changes in our commercial business,” Chief Financial Officer John Gallina said on a post-earnings call.
“As time goes on, we expect a more significant shift of commercial group members to the Medicaid and the ACA marketplace.”
Anthem has reduced its reliance on commercial and individual customers since the 2008 financial crisis by bulking up its government business and launching a new pharmacy benefits management (PBM) unit, which together account for about 75% of its revenue.
“This is the biggest positive takeaway from the quarter, as we were somewhat more concerned about the outlook for health insurers which get a large share of their revenue from employer-sponsored plans,” Cowen analyst Charles Rhyee said.
“We think Anthem’s results should reassure investors and provide positive readthrough for Cigna (CI.N) which reports tomorrow.”
Anthem rivals including UnitedHealth Group Inc (UNH.N) and Centene Corp (CNC.N) have also backed their full-year profit forecasts.
The company, however, warned of uncertainties around the impact from the COVID-19 pandemic and withdrew its forecast for some key performance metrics such as benefit expense ratio and suspended share buybacks to enhance its cash position.
For the first quarter, the company reported adjusted profit in line with estimates of $6.48 per share.
Total revenue rose to $29.62 billion, beating estimates of $28.6 billion.
https://www.reuters.com/article/us-anthem-results/anthem-sees-more-people-opting-for-govt-plans-as-coronavirus-hammers-job-market-idUSKBN22B1BT
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