Health insurer Anthem is weighing whether to sell off its core medical business to cut costs and increase shareholder value, according to people familiar with the matter.
Anthem is also considering selling its entire health care business to reduce debt, people familiar on Tuesday said, suggesting it is exploring a sale.
Anthem’s health care division includes Anthem Blue Cross and Blue Shield of North Carolina, Anthem Blue Shield Health Plan, Anthem Health Systems and Anthem BlueCross BlueShield.
Anthem has about 3.3 million employees, according the person, who asked not to be identified because the discussions were private.
Anthem spokeswoman Andrea DeMars did not respond to a request for comment.
Anthem was once considered a darling of President Donald Trump, who championed its ACA-compliant individual and small group plans and its ACA marketplace health plans.
It lost billions of dollars in 2020 as its ACA marketplaces were rolled out under the Trump administration.
But in the past year, Anthem has struggled with low enrollment, rising premiums and rising deductibles.
Anthem reported a loss of $3.3 billion in 2018, and it reported a $4.3-billion loss for 2019.
Anthem lost about $5 billion in the first half of 2019, and a $1.7-billion profit in the second half.
It has been working on restructuring its business to try to lower costs and attract new customers, said a person familiar with Anthem’s plans.
The company’s CEO, Brian Niccoli, has been criticized for failing to address concerns about the ACA and its cost-sharing subsidies.
Anthem also is struggling to attract customers to its health insurance plans as the ACA’s marketplaces continue to expand.
On Tuesday, a person briefed on the discussions said that Anthem was exploring selling its health care divisions.
The person said the discussions are preliminary.
The Anthem decision would affect about 1 million people, but the person said it could be as high as 10 million people.
Anthem declined to comment.
The people familiar said the conversations were private and the discussions about Anthem’s healthcare business were not public.
Anthem had about 9 million employees as of the end of March.
Anthem did not disclose its net loss in the latest quarter, but it reported net loss of about $4 billion in 2019, including a $2.4-billion gain in the prior-year period.
Anthem said in January that it had cut its full-year 2018 net loss to $1 billion, which would have been the largest in the company’s history.
That was before the ACA was fully implemented and its marketplaces started operating.
Anthem announced plans in October 2018 to shutter its core healthcare business and sell off about 30 percent of its holdings.
A spokeswoman for Anthem declined comment.
On Wednesday, Anthem CEO Brian Nicolisi announced a plan to increase investments in healthcare innovation.
“Anthem has a mission to deliver innovative and cost-effective health plans to patients, while maintaining the highest level of transparency, accountability and value for our customers,” Nicolis said in a statement.
“We are focused on growing our health care operations in a manner that will align with our strategic goals and align with the needs of our customers.”
Anthem also was the first insurer to buy the health insurer UnitedHealth Group in a $5.6 billion deal in December 2018.
The deal gave UnitedHealth more than $1 trillion in assets and created the largest health insurance company in the world.
