Anthem operating gain hits $7.5B, but commercial growth flounders: 10 things to know

Anthem reported $137 billion in year-end revenue for 2021, anchored by government market and pharmacy growth as commercial development seems to stall. 

10 things to know:

1. The payer recorded $137 billion in annual operating revenue, up 13.4 percent from 2020's $121 billion in revenue. 

2. During the fourth quarter, Anthem's operating revenue was $36 billion, up 14.2 percent year over year. 

3. Anthem's annual operating gain was $7.5 billion, up 17.8 percent year over year. 

4. The payer's 2021 operating gain was anchored by its government business, which reported stronger gains than Anthem's commercial and specialty business. Government business represented $3.1 billion in operating gain while commercial and specialty represented $2.8 billion. 

5. Government business operating gain also outpaced commercial gain, which it credits to Medicare and Medicaid development and its MMM Holdings acquisition. Anthem's government operating gain was up 25.2 percent in 2021, while commercial business gain grew 2.7 percent. 

6. In the fourth quarter, Anthem's government operating gain increased 343 percent year over year compared to commercial operating gain, which dropped 40 percent. Anthem credits the drop in commercial operating gain to "higher business optimization expenses."

7. The payer reported a benefit expense ratio of 89.5 percent for the fourth quarter and 87.5 percent for the full year. 

8. Anthem reported serving 45.4 million members at the end of 2021, up 2.4 million members year over year. Of the 2.4 million new members, 2.2 million came from government business.

9. The payer anticipates medical membership to grow to between 45.6 million and 46.2 million in 2022. It also anticipates 2022 operating revenue to hit $152 billion, with premium revenue at $130 billion.

10. During a conference call, Anthem CFO John Gallina said that the payer is bracing for 2022 to bring higher average costs of care, which will be "driven by COVID-related treatment, vaccination, and testing costs."

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