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About Anthem, Inc.

Health benefits provider Anthem, through a number of subsidiaries, provides health coverage to more than 40 million members in the US. One of the nation's largest health insurers, Anthem is a Blue Cross and Blue Shield Association licensee in more than a dozen states (where it operates as Anthem, Empire, and BCBS) and provides non-BCBS plans under the Unicare, Amerigroup, CareMore, Simply Healthcare, HealthSun, HealthLink, and other brands in more than 25 states. Plans include PPO, HMO, POS, indemnity, and hybrid plans offered to employers, individuals, and Medicare and Medicaid recipients. Anthem also provides administrative services to self-insured groups, as well as specialty insurance. 

Operations

Anthem operates through three segments: Government Business, Commercial and Specialty Business, and Other.

The Government Business segment, accounting for about 60% of Anthem's total revenue, provides Medicare Advantage, Medicare Part D, supplemental, special needs, and dual-eligibility plans, as well as Medicaid and Children's Health Insurance Programs (CHIP) coverage. The segment's National Government Services unit acts as a Medicare contractor in some regions. The segment also includes services related to the Federal Employee Program.

The Commercial and Specialty Business segment, accounting for about 40% of sales, provides BCBS and non-BCBS health plans for employer groups and individuals; managed care services such as claims processing and underwriting for self-funded groups; and specialty products including dental, vision, life, and disability coverage.

Through several of its subsidiaries, Anthem also performs claims processing, fraud prevention, benefits management, and other administrative tasks for government-run Medicare plans, other insurance firms, and employer groups.

Altogether, the company serves around 73 million customers.

Geographic Reach

Anthem is headquartered in Indianapolis, Indiana, and its subsidiaries are licensed to conduct insurance operations in all 50 states. It serves BCBS customers in more than a dozen states including California, New York, and Virginia and serves non-BCBS customers in more than 25 other states under UniCare, Amerigroup, Simply Healthcare, and other brand names.

The firm has its largest concentration of customers in California, Florida, Georgia, Indiana, New York, Ohio, Texas, and Virginia. 

Sales and Marketing

Anthem markets most of its products through a network of independent agents and brokers. The exception is the company's national account and large, employer-focused products, which are sold by an in-house sales force, customer-hired consultants, and independent brokers.

The company uses print, broadcast, and other modes of advertising to promote itself. Advertising expenses totaled $385 million, $338 million, and $246 million for 2018, 2017, and 2016, respectively.

Altogether, the company serves more than 78 million people, including 40 million health plan members. 

Financial Performance

Anthem has steadily grown its revenue over the past five years, increasing sales by a total of 25% between 2014 and 2018. Net income fluctuated in the $2.5 billion to $4 billion range but showed an overall increase of 46% in the five-year period.

Revenue increased 2% to some $92.1 billion in 2018 on higher insurance premiums and administrative fees, as well as a rise in net investment income. Insurance premium growth was concentrated in the Government Business segment; premiums in the Commercial and Specialty Business segment declined, primarily due to lower participation in ACA individual plan marketplaces.

Net income declined 2% in 2018, falling below $3.8 billion, due to higher income tax expenses. 

The company ended 2018 with $3.9 billion in cash, up $325 million from 2017. Operating activities contributed $3.8 billion, while investing activities used $1.3 billion (mostly acquisitions and property and equipment purchases), and financing activities used $2.2 billion via debt payments, stock repurchases, and dividend payments.

 

Strategy

Anthem grows through acquisitions and organic measures, including launching new plans and adding new members in existing markets.

Increasing coverage in the Medicare market is a significant part of Anthem's growth strategy: The company anticipates more than 1 million Baby Boomers will become eligible for Medicare every year through 2030 in all of Anthem's Blue-branded states, and it is beefing up its Medicare offerings and expanding into new service territories to prepare for the change, including via several acquisitions.

The company scaled back on its individual health exchange plans following the termination of the federal cost-sharing reduction subsidy in 2017. However, in 2019 Anthem took cautious steps to expand its exchange offerings in select service territories as the market stabilized.

Like all health insurers, Anthem is working to stay ahead of health care reform efforts to lower medical costs in the US. The company is developing new plans that put more responsibility on consumers; the plans depend on an insurer's ability to negotiate lower prices with providers and include quality and cost optimization measures such as care management, provider credentialing, service pre-authorization, and wellness reward programs. Anthem has also formed a new PBM unit, IngenioRx, that will work with CVS to improve prescription benefits management processes, and it has launched new care management programs for chronically ill patients.

The company is involved in litigation related to its 2017 termination of its merger agreement with rival insure Cigna.

Mergers and Acquisitions

In 2019, Anthem acquired behavioral health organization Beacon Health Options as part of its strategy to diversify into health services. The firm aims to provide integrated and personalized care delivery models for people with complex and chronic conditions. 

In 2018, Anthem purchased Medicare Advantage firm America's 1st Choice, which operates under the Freedom Health and Optimum brands in Florida and the America's 1st Choice brand in South Carolina. 

In mid-2018, the company acquired Aspire Health, which provides community-based, non-hospice palliative care to patients suffering from serious illnesses. This deal underscores the firm's efforts to transform its care delivery model to improve results.

Company Background

Anthem traces its roots back to the formation of Blue Cross of Indiana and Blue Shield of Indiana in 1944 and 1946. The company changed its name to WellPoint after merging with WellPoint Health Networks in 2004; WellPoint Health Networks was formed by Blue Cross of California in 1992. The company changed its name from WellPoint back to Anthem in 2014.

In 2017 a federal judge blocked the planned $48 billion merger between Anthem and rival Cigna. The combined health insurance behemoth would have served some 53 million customers and generated sales of about $115 billion. The merger was blocked just weeks after a similar planned merger between Aetna and Humana was halted.

Recent acquisitions have included HealthSun (Medicare Advantage in Florida, 2017) and Simply Healthcare (2015).

Anthem, Inc.

220 VIRGINIA AVENUE
Indianapolis, IN 46204-3632
Phone: 1 (317) 488-6000

Stats

Employer Type: Publicly Owned
Stock Symbol: ANTM
Stock Exchange: , NYSE
President, CEO and Director: Gail K. Boudreaux
EVP and CFO: John E. Gallina
Chairman: Joseph R. Swedish
Employees (This Location): 146
Employees (All Locations): 63,900

Major Office Locations

Indianapolis, IN

Other Locations

Costa Mesa, CA
Downey, CA
Glendale, CA
La Mirada, CA
Long Beach, CA
Los Angeles, CA
Modesto, CA
Montebello, CA
San Jose, CA
Santa Barbara, CA
Thousand Oaks, CA
Walnut Creek, CA
Westlake Village, CA
Whittier, CA
Maitland, FL
Miami, FL
Orlando, FL
Plantation, FL
Brookhaven, GA
Chicago, IL
Deerfield, IL
Westchester, IL
Indianapolis, IN
Lexington, KY
Shelbyville, KY
Baton Rouge, LA
Metairie, LA
Andover, MA
Hanover, MD
Saint Louis, MO
Iselin, NJ
Las Vegas, NV
Reno, NV
Albany, NY
Bronx, NY
Brooklyn, NY
East Syracuse, NY
Jackson Heights, NY
Middletown, NY
New York, NY
Canton, OH
Cincinnati, OH
Mason, OH
Seven Hills, OH
Worthington, OH
Nashville, TN
Bellaire, TX
Corpus Christi, TX
El Paso, TX
Houston, TX
San Antonio, TX
Bristol, VA
Newport News, VA
Richmond, VA
Fond Du Lac, WI
Waukesha, WI
Beijing, China