Anthem’s third-quarter profit jumped 23 percent, and the Blue Cross-Blue Shield insurer raised its 2019 forecast after pulling in more people covered by Medicare Advantage and Medicaid.
Anthem also gave investors an initial glimpse into next year’s profit expectations.
CEO Gail Boudreaux told analysts Wednesday morning that the company expects core, adjusted earnings to grow near the low end of its goal of 12 percent to 15 percent, which is similar to rival UnitedHealth Group Inc.’s estimate made last week.
Anthem will enter 2020 helped by its new pharmacy benefit manager, IngenioRx, which the company is starting with help from CVS Health Corp. Anthem expects to have all of its customers moved over to IngenioRx by Jan. 1.
The Indianapolis-based insurer covers about 41 million people, mostly through employer-sponsored health plans. But it also saw enrollment in Medicare Advantage plans, which are privately run versions of the government’s Medicare program, jump 21 percent to 1.2 million people in the recently completed third quarter.
Its enrollment in state and federally run Medicaid programs rose 8 percent to 7.3 million.
Overall, Anthem’s net income climbed to $1.18 billion from $960 million. Earnings adjusted for one-time items came to $4.87 per share.
Excluding investment gains, operating revenue climbed 15 percent to $26.44 billion.
The results surpassed Wall Street expectations. Analysts expected, on average, earnings of $4.84 per share on $25.41 billion in revenue.
Anthem now expects adjusted earnings to be greater than $19.40 per share for the year. That’s a dime higher than the forecast it made in July.
Analysts expect, on average, $19.35 per share, according to FactSet.
Anthem shares climbed 3 percent, or $7.75, to $268 in late morning trading Wednesday, while broader markets were mixed.
Health insurance stocks have had a turbulent year, rising and falling as some Democratic presidential candidates have renewed a push for a “Medicare for All” plan that could replace private coverage and as Congressional committees investigated soaring drug costs.
But the stocks have largely rallied since UnitedHealth reported its better-than-expected quarter last week and also raised its 2019 forecast.