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

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.

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.