Net income declined over 65% to $424 million or $1.61 per share from the prior-year period. Last year’s fourth quarter results included an income tax benefit of $1.1 billion. Adjusted EPS totaled $2.44.
Medical enrolment totaled approx. 39.9 million members at December 31, 2018. This compares to 40.3 million members at December 31, 2017. The drop was caused by declines due to a reduced footprint in the Individual ACA-compliant marketplace and declines in Local Group enrolment.
Also see: Anthem Q4 2018 Earnings Conference Call Transcript
The benefit expense ratio dropped 180 basis points to 86.8% from last year’s fourth quarter, mainly driven by the return of the health insurance tax in 2018 and improved medical cost performance in the Commercial & Specialty Business. Days in Claims Payable was 36.2 days at quarter-end.
Anthem is accelerating the launch of its pharmacy benefits manager, IngenioRx, and expects to start transitioning members in the second quarter of this year. The company expects to gain gross annual savings of more than $4 billion from IngenioRx and plans to return over 20% of this amount to shareholders.
Anthem surpasses Q3 results expectations and raises guidance
For the full year of 2019, operating revenue is expected to be approx. $100 billion. GAAP EPS is expected to be greater than $18, reflecting an increase of 27% from 2018. Adjusted EPS is expected to grow 20% from last year to over $19, reflecting the benefit from the accelerated launch of IngenioRx. Medical membership is expected to be in the range of 40.9 million to 41.3 million.
On January 29, Anthem declared a dividend of $0.80 per share for the first quarter of 2019, payable on March 29, 2019 to shareholders of record on March 18, 2019. On an annualized basis, this equates to a dividend of $3.20 per share.