Insurer Anthem tops 1Q expectations, raises 2019 forecast

INDIANAPOLIS (AP) — Anthem beat Wall Street's first quarter expectations and raised its 2019 forecast, helped by a growth spurt in one of the Blue Cross-Blue Shield insurer's more profitable lines of coverage.

The nation's second largest insurer said Wednesday that enrollment in its fully-insured coverage jumped more than 6% to 15.3 million compared to last year's first quarter. That helped push the company's total membership past 40 million people.

Fully insured coverage includes plans sold to small businesses. It is generally more profitable for insurers than coverage that larger employers buy where they pay the claims and leave the insurer to administer the plan.

SVB Leerink analyst Ana Gupte called the insurer's growth in fully insured enrollment "meaningful" and said in a research note that it is helping Anthem live up to its promise of market share improvement.

Indianapolis-based Anthem Inc. runs insurance plans in several states, including big markets like California and New York. The insurer also saw growth in government-funded Medicaid and Medicare coverage in the first quarter.

Overall the insurer's net income jumped 18% to $1.55 billion in the first quarter. Earnings, adjusted for one-time gains and costs, came to $6.03 per share.

Operating revenue, which excludes investment income, climbed 9% to $24.39 billion.

Analysts expected, on average, earnings of $5.86 per share on $24.25 billion in revenue, according to Zacks Investment Research.

Anthem also said Wednesday that it now expects adjusted earnings this year to exceed $19.20 per share, up from a forecast it made in January for better than $19 per share.

Analysts forecast, on average, earnings of $19.17 per share for 2019, according to FactSet.

Anthem expects to get an earnings boost later this year from its new pharmacy benefit management business called IngenioRx. The insurer will begin moving customers into that business next month.

Anthem decided to start IngenioRx after splitting with Express Scripts, which used to run prescription benefits for the insurer.

Health insurers have been delving deeper into pharmacy benefits as part of a broader push to control health care costs. Businesses that manage prescription drug coverage can give them more data on their customers and help them better manage their care.

Shares of Anthem fell less than 1% to $249.34 in midday trading Wednesday while broader indexes were mixed.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on ANTM at https://www.zacks.com/ap/ANTM

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