Shares of the Indiana-based company rose 2.7
percent to $257.39 before the opening bell.
Last year, the health insurance sector experienced its biggest
shake up in years, as rivals Aetna and Cigna Corp closed deals
with the biggest U.S. pharmacy benefits managers.
Anthem, which operates Blue Cross Blue Shield plans in 14
states, also overhauled its pharmacy benefits business after
years of relying on Express Scripts to handle those operations.
Its new company, IngenioRx, is expected to be launched during
the second quarter with the help of CVS Health Corp.
For 2019, Anthem said it expects adjusted earnings to be above
$19.20 per share, higher than its prior estimate of more than
Members in the company's health plans rose by 1.2 million to
40.8 million, helped by growth in the government business that
provides Medicare health plans for people aged 65 and older and
Medicaid plans for the poor.
The company gained market share across its commercial, Medicare
and Medicaid businesses and its earnings forecast for the year
beat the average Wall Street estimate of $19.17, implying
consensus estimates will move higher, Stephens Inc analyst Scott
Anthem's benefit expense ratio — the percentage of premiums
taken in that are paid out for medical services — worsened to
84.4 percent in the quarter from 81.5 percent a year earlier,
partly due to a one-year waiver of the health insurance tax in
2019. Analysts on average had expected 84 percent, according to
IBES data from Refinitiv.
The company said certain states in which it runs Medicaid plans
saw higher medical costs.
Net income rose 18.2 percent to $1.55 billion, or $5.91 per
share, in the quarter ended March 31.
Excluding items, the company earned $6.03 per share, ahead of
the average analyst estimate of $5.81.
Total revenue rose 9.4 percent to $24.67 billion, beating
analysts' estimates of $24.28 billion, helped by membership
growth across the company's businesses and premium rate
(Reporting by Tamara Mathias in Bengaluru; Editing by Maju
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