Players in the health insurance industry (IYH) rely on an optimal business mix that diversifies business risk while ensuring sustained profits.
In 2014, of Anthem’s (ANTM) three segments, Commercial and Specialty Business accounted for 53.7% of total revenues, and Government Business contributed 46.3%. Revenues earned by the Other segment were insignificant.
The Government Business share has nearly doubled since 2008, up from 27% of total revenues. The company’s focused diversification strategy is responsible for the shift.
Commercial and Specialty
The Commercial and Specialty Business segment provides services such as medical, dental, behavioral health, vision, and pharmacy insurance for employer-sponsored as well as individually insured people. The company’s product suite includes offerings such as PPO (preferred provider organization) and HMO (health maintenance organization), as well as health technology and consumer-centric solutions. Anthem also offers life and disability insurance products as a part of its Commercial and Specialty Business.
Group life insurance products are mainly offered by employers and provide protection against loss of income in case the insured employee dies. Group disability insurance products offer income protection for members in case of a disability, by providing part of the lost income for a specified period of time.
Anthem provides insurance services to Medicaid and Medicare beneficiaries, NGS (National Government Services), and services provided to the federal government in relation to the FEP (federal employee health program). NGS operates as a contractor for Medicare services in several regions in the US.