Anthem sees revenue rise, but expects losses on ACA plans: 5 things to know

Anthem saw financial gains in the second quarter of 2016 due to an increase in Medicaid membership, but higher costs from the insurer's Affordable Care Act plans dragged down its bottom line.

Here are five things to know about Anthem's financial results for the second quarter.

1. Anthem saw revenue rise 7.2 percent year over year to $21.46 billion in the second quarter. The financial boost was partially attributable to a 0.4 percent increase in medical enrollment during the second quarter. The growth was largely due to gains in Medicaid business.

2. Under the Affordable Care Act, insurers selling individual health plans are required to have a medical loss ratio of at least 80 percent, meaning they must spend at least 80 cents out of every premium dollar on customers' medical care. Anthem reported a medical loss ratio of 84.2 percent in the second quarter of 2016, an increase from 82.1 percent in the same period of the year prior.

3. Like many other insurers, Anthem said it expects to lose money on its ACA plans this year. The insurer said its worse-than-expected results on the ACA business were attributable, in part, to expenses related to enrollees' chronic conditions. Anthem is a major player in the ACA marketplace, with 923,000 exchange enrollees across 14 states, according to The Wall Street Journal.

4. Anthem faces lawsuits from the Department of Justice and attorneys general from several states aiming to block its acquisition of Cigna. However, in the company's earnings release, Anthem President and CEO Joseph Swedish said the insurer is devoted to the deal.

"Our commitment to the pending Cigna acquisition remains as strong as ever and we believe this acquisition will further advance affordability and quality for our customers," he said.

5. Anthem ended the second quarter with net income of $780.6 million, down 10.1 percent from net income of $859.1 million in the same period of 2015.

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