Health insurer Anthem profit rises 17.5 percent

Anthem said growth in the business of covering “dual eligibles”, people who qualify for both Medicare and Medicaid, has been slower than expected. But Anthem said one California county’s pilot program was withdrawn, and the insurer is seeing slow uptake from beneficiaries in Los Angeles County, Virginia and New York.

That topped analyst expectations for $19.66 billion.

Anthem said the impact of two Affordable Care Act programs that are supposed to help insurers that enroll a large share of sicker, high-cost consumers was roughly what it expected.

But even without the growth by acquisition, Anthem is on a roll, reporting total medical enrollment of 38.5 million as of June 30, which is 1.3 million more members than at the end of last year’s second quarter.

Under the health law, states have the option to expand Medicaid coverage for poor Americans and more are dropping past political option and doing so to the benefit of the health insurance industry that contracts with the government to provide these health benefits.

Net income rose to $859.1 million, or $3.13 per share, for the second quarter ended June 30, from $731.1 million, or $2.56 per share, a year earlier.

For full year 2015, the company projects adjusted net income to be greater than $10.00 per share on operating revenue of around $78.0 billion. Excluding one-time items, the company’s earnings jumped to $3.10 per share from $2.56 per share.

Revenue increased 8.3 percent to US$20.02 billion, topping analysts’ expectations of US$19.63 billion.

The commercial and specialty business enrollment – referring mostly to businesses that self-fund their medical expenses – increased by 237,000.

Medicaid membership jumped 19.5% from the prior-year period to 5.76 million in the quarter.

Anthem, which operates Blue Cross Blue Shield plans in more than a dozen states, said on Wednesday that spending on medical claims as a percentage of premiums fell to 82.1 percent from 82.7 percent a year ago.