Anthem Earnings Call Projects COVID-19 Vaccine Impact, ACA Growth

January 28, 2021 - Coronavirus vaccine distribution and the new administration may have an impact on payers’ costs and marketplace growth in 2021, Anthem’s fourth quarter of 2020 earnings call revealed.

“Despite uncertainties with the pandemic, Anthem delivered strong growth across all of our businesses in 2020 reflecting the diversity and strength of our portfolio and our unwavering commitment to those we serve,” Gail K. Boudreaux, president and chief executive officer of Anthem, Inc, said in the press release.

“I am proud of all that we accomplished during this challenging time, and we remain focused on supporting our members, customers, and communities as a trusted health partner.”

On the call, Boudreaux noted that commercial membership growth was flat in the fourth quarter, with growth in the risk-based business being offset by fee-based business changes.

Anthem’s 2020 organic growth in Medicaid membership increased by 1.6 million beneficiaries. Boudreaux and others on the call attributed this to the pause on reverifications as well as Anthem’s acquisitions in Nebraska and Missouri. 

READ MORE: 2021 Payer Strategies Build on Telehealth, Gene Therapy Lessons

The payer took in over $120.8 billion in operating revenue in 2020 and projected that it would reach $135.1 billion in operating revenue in 2021. This would amount to approximately 11.8 percent growth if those expectations are realized.

Boudreaux’s vision for Anthem in 2021 is to modernize its business to direct growth. Automating processes and embedding artificial intelligence (AI) were two methods that she indicated would fuel this modernization.

She pointed to examples from 2020, such as the company’s AI-powered digital nutrition assistant, the 5 million callers who were directed toward on-demand digital channels for quick answers, and the consistently higher utilization of telehealth, which currently accounts for 60 percent of Anthem’s behavioral healthcare visits.

Looking toward 2021, Anthem executives predicted that the vaccine rollout may have an impact on payers’ costs and they also expected that the Biden administration’s approach to the Affordable Care Act would boost marketplace business growth.

Coronavirus pandemic’s impact on payer spending

Despite the company's gains in 2020, Anthem saw evidence of the pandemic’s influence in the payer’s fourth quarter 2020 care utilization levels. These levels were above baseline due to December’s spike in coronavirus cases paired with patients’ return to elective care.

READ MORE: How Top Payers Are Providing COVID-19 Vaccine Coverage, Support

The payer also expected the coronavirus pandemic to land a financial impact in 2021. Boudreaux braced investors for a drop in revenue due to coronavirus-related costs as well as the Consolidated Appropriations Act, which increased Medicare physicians’ rates for one year.

However, Boudreaux stressed that the payer does not expect to see the pandemic’s impact continue into 2022 in these areas.

The company is also anticipating costs related to coronavirus vaccinations.

In 2020, Anthem set up an online vaccine tracker that provides coronavirus vaccination information, aggregating public and private data to piece together a picture of vaccine distribution in real time. This aims to help members assess when they could receive the coronavirus vaccine.

“There is a lot of variability and assumptions,” John Gallina, chief financial officer and executive vice president at Anthem Inc, said of the environment around vaccine distribution.

READ MORE: Payers Expect Biden to Expand Affordable Care Act in 2021

The goal is to have 60 percent of Americans vaccinated in 2021, with a higher percentage of vaccination in the Medicare population, Gallina said. Medicaid populations will likely not receive the vaccine until summertime and the commercial population will have access later in the year.

“The rollout and the efficacy of the vaccine very clearly could have an impact on the financial results for the year,” Gallina confirmed.

“As COVID costs go down, then we do expect non-COVID utilization to increase. So it’s certainly not a one-for-one. But there’s clearly a lot of dynamics associated with that modeling, and if the vaccine is either faster or slower it’ll have an impact in one direction or another.”

“We are trying to model in this incredibly dynamic environment, but remain optimistic and supportive of what’s happening and want to be a good partner to our states and our customers,” added Boudreaux.

New administration’s influence on Affordable Care Act marketplace growth

In 2021, Anthem expects to expand its presence on the individual health insurance marketplace into 115 counties. The payer is already a heavyweight in the Affordable Care Act marketplace arena, with its Blue Cross Blue Shield companies holding nearly 50 percent market share on the exchange.

Peter Haytaian, executive vice president and president for Anthem, Inc.’s commercial and specialty business division, indicated that Anthem would continue to focus on value-based care and differentiated medical management in its individual health insurance marketplace.

Payer executives acknowledged that the environment is growing more competitive, however. New sales on the federally facilitated marketplace and state-based marketplaces have dropped year-over-year, according to Haytaian. Special enrollment periods that opened up throughout 2020 due to coronavirus-related job loss could have instigated some of that decline.

The exchanges also received low support on the federal level, Haytaian noted, but this is likely to change with the Biden administration.

“The new administration certainly looks like they’re going to promote and prop up the ACA business,” said Haytaian. “We just heard this week that we’ll likely see an extension to open enrollment or special enrollment periods throughout the year and then a possibility of more marketing and facilitated enrollment expenditures.”

Thus, the president’s support for the Affordable Care Act may spur higher growth on the marketplace, the Anthem executive indicated.