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 plans under the Unicare, Amerigroup, CareMore, Simply Healthcare, HealthSun, and HealthLink names in other 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. In 2017 a federal judge blocked the planned merger between Anthem and rival Cigna.
Anthem operates through three segments: Government Business, Commercial and Specialty Business, and Other.
The Government Business segment offers Medicare and Medicaid Services including Medicare Advantage and Medicare Part D, as well as National Government Services and services related to Blue Cross and Blue Shield's Federal Employee Program. That segment accounts for around 55% of Anthem’s total revenue.
The Commercial and Specialty Business segment provides fully insured health products, managed care services such as claims processing and underwriting, and specialty products including dental, vision, life, and disability coverage. It accounts for around 45% of Anthem's revenues.
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.
Anthem is headquartered in Indiana and, through its various operations, is licensed to conduct insurance operations in all 50 states. It serves Blue Cross customers in California, New York, and Virginia, among other states.
Subsidiary Unicare sells group and individual health coverage in geographic areas where Anthem is not a Blue Cross licensee. The company's AMERIGROUP subsidiary, which provides health insurance for public programs, operates in Florida; Texas; Washington, DC; and other states. Simply Healthcare and HealthSun offer managed care services for Medicaid and Medicare recipients in Florida.
Despite Anthem's expansion into other business areas in recent years, the company's Blue-focused expansion efforts in past decades have kept Blue-branded health coverage at the core of its business. Many of the its Blue subsidiaries operate under the name Anthem Blue Cross Blue Shield.
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 $337.9 million in 2017, versus $246.2 million in 2016 and $313.5 million in 2015.
Anthem has posted several years of steady revenue growth, including in 2017 when revenue rose 6% to $90.0 billion. That increase was largely due to higher premium revenue (from rate increases and membership growth) in both the Government Business and the Commercial and Specialty Business segments. However, these gains were partially offset by a decline in the Government Business segment’s managed care services business.
Net income for Anthem has generally been on the rise, including in 2017 when it rose 56% to $3.8 billion. (This after net income dipped modestly in 2015 and 2016.) Driving growth in 2017 were decreases in income tax expenses and gains on investment activities. Operating results for both primary segments dragged profits down, though.
Thanks largely to the growth in net income, cash flow from operations increased 28% to $4.2 billion that year.
Overall, Anthem hopes to get bigger through acquisitions in combination with organic expansion such as adding new members in existing markets.
Covering 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.
Like all health insurers, Anthem is working to stay ahead of health care reform and ongoing changes to the Affordable Care Act (ACA). For example, with the 2017 termination of the federal cost-sharing reduction subsidy, the company elected to reduce its participation in several ACA marketplaces. The company continues to operate its own private exchange, Anthem Health Marketplace. It sees opportunity in private exchanges, which show promise in the commercial space going forward.
Mergers and Acquisitions
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. This acquisition followed the 2017 purchase of HealthSun, another Medicare Advantage specialist serving some 40,000 members in Florida. With those purchases, Anthem broadened its Medicare and Medicaid operations.
In mid-2017, 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.
A federal judge blocked what would have amounted to a huge, industry-reshaping deal in 2017 -- Anthem's attempt to acquire competitor Cigna for some $48 billion. 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.
120 MONUMENT CIR
Indianapolis, IN 46204-4902
Phone: 1 (317) 331-1476
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
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