Anthem earnings rise 23 percent

INDIANAPOLIS – Growing enrollment in its national health insurance plans drove earnings at Anthem Inc. up 23 percent during the third quarter, the company reported Wednesday.

The nation’s fourth-largest health insurance company earned $242.1 million, or $1.70 per share, for the three months ending Sept. 30, compared with $196.5 million, or $1.38 per share, for the third quarter of 2003.

Revenues rose 13 percent to $4.8 billion from $4.3 billion for the Indianapolis-based licensee for Blue plans in Indiana, Kentucky, Ohio, Connecticut, New Hampshire, Colorado, Nevada and Maine, and part of Virginia.

Chairman and chief executive Larry C. Glasscock cited an 8 percent growth in health plan enrollment for driving down Anthem’s administrative expense ratio by 180 basis points to 16.9 percent. Enrollment has grown by 890,000 members since September 2003, including 810,000 since the start of the year.

Glasscock, in a news release, reminded investors “we are also very committed to completing our proposed merger with WellPoint Health Networks.”

Anthem has sued California Insurance Commissioner John Garamendi, saying he exceeded his authority when on July 23 he vetoed the proposed $16.4 billion cash-and-stock merger of the nation’s two largest Blue Cross Blue Shield companies. Garamendi has said it would pull millions of dollars out of his state, lower health care quality for consumers and give too much severance pay to executives.

Nine other affected states, the U.S. Department of Justice and Puerto Rico have approved the merger, which was announced a year ago and would create the nation’s largest health insurance company.

Thousand Oaks, Calif.-based WellPoint on Monday reported its third-quarter net income rose 28 percent to $315.1 million, or $1.97 a share, on 16 percent revenue growth to $5.85 billion.

Anthem advised it expects its fourth-quarter net income to be consistent with the third-quarter results. For all of 2004, it expects to earn $7.05 to $7.10 per share, up from its previous guidance of $6.95 to $7.05 per share. It expects 2005 net income to grow 15 percent over 2004.