Anthem says COVID-19 didn't have a major impact on Q1 results but warns effects are coming

Anthem headquarters
Anthem released its first-quarter earnings report Wednesday. (Anthem)

Anthem executives said that COVID-19 wasn't a major factor in its performance in the first quarter of 2020, but they expect to feel that hit later in the year.

CEO Gail Boudreaux said on the company's earnings call Wednesday morning that the insurer is currently working to understand the costs related to the virus, including treatment and testing.

"We're closely monitoring the situation and, as you know, this is emerging information for us around how the coronavirus will translate over the course of this year," Boudreaux said.

Due to the uncertainty around the pandemic, Anthem said it would withdraw most of its 2020 guidance numbers until the financial impacts shake out further.

The insurer said it expects to see GAAP earnings that are greater than $21 per share and adjusted earnings of $22.30 per share this year.

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Boudreaux said one element related to the pandemic they're well-positioned for is the likelihood that members will drop out of commercial plans as unemployment grows. She said that Anthem's diverse business lines will allow them to respond strongly.

Anthem has significant reach in Medicaid and the individual exchanges, which can close gaps if employer plan membership declines, she said.

Anthem earned $1.5 billion in profit for the first quarter of 2020, missing Wall Street's expectations.

The insurer raked in $29.6 billion in revenue for the quarter, it said in its earnings release Wednesday. That was up about 20% from $24.7 billion in the first quarter of 2019.

In its earnings report (PDF), Anthem touted the steps it has taken to date to combat the COVID-19 pandemic, which includes easing administrative burdens on providers, waiving cost-sharing for testing and treatment for the virus and offering millions in community aid through its foundation.

“Anthem recognizes the important role we play as part of the national response to the COVID-19 pandemic,” Boudreaux in a statement. “Guided by our mission and values, Anthem is engaging across the country and in our local communities to support our members, customers and partners with relief and care during this challenging time."

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Anthem boasted 42.1 million members in the first quarter, an increase of 1.3 million over the same quarter a year earlier. Much of that growth was in government plans, which saw an increase of 849,000 members, largely in Medicaid.

It also reported $349 million in operating gain from its IngenioRx pharmacy benefit manager, which launched in the second quarter of 2019. Boudreaux said on the earnings call that the PBM is performing ahead of Anthem's expectations.

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