Here’s what you need to know about Anthem–the giant for-profit health insurer that owns several Blue Cross plans across the country–that no one else seems to be paying attention to:
- Anthem, one of the Big Six health insurers, has gone from a company that just 10 years ago took in far more money from private-paying customers (remember those days?) to one that now gets more than twice as much money from us taxpayers.
- Anthem is far from alone: All of the big for-profits have experienced a similar shift in who their customers are and where their revenue comes from.
- Increasingly, at every single one of the Big Six (Anthem, Centene, Cigna, CVS/Aetna, Humana, and UnitedHealth), the trillions of dollars that flow into their bank accounts now come from the taxpayer-financed Medicare and Medicaid programs.
- During the first three months of this year, Anthem took in $37.9 billion in total revenues, but only 27% of it came from private-paying individuals and employers that offered coverage to their workers. That’s a huge swing from the same three months in 2012 when 56% of the company’s revenues came from private-paying customers.
- As I noted a few days ago, UnitedHealth Group’s shape-shift has been even more dramatic: 100% of the growth in United’s health plan enrollment has come from the taxpayer-financed Medicare and Medicaid programs. In fact, United had 35,000 fewer people enrolled in its individual and employer-sponsored plans in the first quarter of 2022 than in the same period in 2012.
- The dramatic changes in the Big Six’s revenue, profit, and health plan enrollment numbers since 2012 show that the employer-based system of health insurance is crumbling at a fast clip, primarily because fewer and fewer employers can afford to offer subsidized coverage to their workers. Only 31% of employers with 50 or fewer workers are now offering health benefits.
- BUT: Because insurers make their private-paying customers pay not only far more in premiums but also far more out of their own pockets before their coverage kicks in, the Bix Six’s individual and employer-sponsored health plan businesses are exceedingly profitable.
- Consider this: The operating profit margin of Anthem’s commercial (private-paying) book of business was 10.5% during the first quarter of this year. By contrast, the operating profit margin of its government business, which has experienced explosive growth over the past 10 years, was 3.3%.
- What this means is that Anthem’s remaining private-paying customers are contributing disproportionately to Anthem’s profits, which totaled $2.4 billion in the first quarter of this year. This is happening because employers clearly are not adequately scrutinizing insurers’ business practices to understand how the Big Six are taking their customers to the cleaners–year after year after year.
A FEW OTHER STATS:
- Revenue from Anthem’s private-paying customers was 20% higher during the first quarter of 2022 than the first quarter of 2012 ($23.76 billion and $8.51 billion, respectively) as enrollment in its commercial health plans increased about 8% over those 10 years, from 28.79 million in 2012 to 31.36 million this year.
- Revenue from Anthem’s government customers, by contrast, was 500% higher in the first quarter of 2022 than during the same quarter in 2012 ($23.76 billion and $4.75 billion, respectively) as enrollment in its government-paid health plans increased by 316%, from 4.88 million in 2012 to 15.41 million this year.
- While most of United’s enrollment growth over the past 10 years came from massive growth in its Medicare Advantage business, most of Anthem’s growth came from the Medicaid programs it operates for several states. Anthem reported 1.87 million people were enrolled in its Medicaid plans at the end of the first quarter of 2012. Anthem’s Medicaid enrollment has increased by 584% over the past 10 years, to 10.92 million on March 31, 2022.
- Still, Anthem’s Medicare Advantage enrollment increased almost 25% to 1.9 million over just the past year.
- Anthem’s executives were so pleased with the company’s first-quarter profits that they told investors they expect to make more money this year than they previously expected.
- Wall Street seems to love what Anthem is doing, even though more and more of its customers are becoming functionally uninsured because they can’t afford their out-of-pocket requirements.
- On March 31, 2012, you could have bought a share of Anthem stock for $63.38. At the end of the first quarter of this year, a share would have cost you $491.22. And when the stock market closed today, that share would have been worth $516.74–an increase of $25.52 a share in less than a month.
Bottom line: Anthem’s investors are getting richer as more and more Anthem customers file for bankruptcy or beg for money on GoFundMe to cover their out-of-pockets.