Anthem reported a 4 percent increase in third-quarter profit and beat Wall Street forecasts as the number of people the health insurer covers edged slightly higher.
The Blue Cross-Blue Shield insurer also boosted its adjusted 2015 net income forecast for the third time this year, to $10.10 to $10.20 per share. That’s up from its July forecast for more than $10 per share, but still below the $10.20 per share that Wall Street is anticipating.
Anthem, which is planning to buy rival Cigna Corp., reported third-quarter net income of $654.8 million, or $2.43 per share. Adjusted for one-time costs, that amounted to $2.73 per share, 40 cents better than analysts projected.
The Indianapolis company reported operating revenue, which excludes investment income, totaling $19.77 billion. That’s up 7.6 percent from $18.37 billion last year and above Street forecasts for $19.71 billion.
Anthem said Wednesday that it now expects full-year revenue to be $78 billion.
Membership grew by 174,000 members, or 0.5 percent, to a total of about 38.7 million since the second quarter.
The enrollment gain came from Anthem’s government business, which the company continues to rely on for growth. Anthem said Medicaid enrollment increased by 15.5 percent, Medicare enrollment by 2.8 percent and Federal Employee Program enrollment by 2 percent. That was partially offset by an 8.8 percent enrollment decrease in the individual customer business.
Since the end of 2014, enrollment in Medicare, Medicaid and federal employee plan enrollment is up by a combined 856,000.
“Our solid third-quarter 2015 results reflect continued enrollment growth in both commercial and government business segments and our emphasis on driving greater affordability and choice for members,” CEO Joseph Swedish said in a printed statement.
Anthem Inc., which changed its name from WellPoint late last year, administers the state-and-federally funded Medicaid program for poor and disabled patients in several states and also provides Medicare Advantage coverage. It is the nation’s second-largest health insurer.
Medicaid in particular has become a ripe area for growth because many states are expanding eligibility for the program as part of the health care overhaul, the federal law that is expanding insurance coverage to millions of people. Anthem also sells commercial coverage in 14 states through public insurance exchanges created by the overhaul.
Anthem announced last summer that it planned to buy Cigna for $48 billion, part of a wave of consolidation across the sector. Aetna plans to buy Medicare Advantage coverage provider Humana for about $35 billion. The deals are under regulatory review. Both acquisitions have drawn concern from politicians and some members of Congress over their potential impact on consumers.
The acquisitions have stirred worry about how they may affect the choices consumers have for coverage and whether insurers will raise premiums when they become bigger and gain even more leverage.
Anthem shares have climbed 15 percent since the beginning of the year. The stock has increased 20 percent in the last 12 months.