Anthem Blue Cross 2010 Annual Report Download - page 11

BUILD ON STRENGTH We believe we will
win in the new marketplace by building on
our strengths in the health benefits industry,
including increasing market share in growth
businesses, nurturing investments in stable
businesses and optimizing near-term poten-
tial in others.
Starting January 1, 2011, reform
requires that at least 80 or 85 percent of pre-
miums paid go toward medical care and
some quality programs for certain products.
This means it is very important to operate
with administrative efficiency while continuing
to provide good customer service. During
2010, we reduced our selling, general and
administrative expenses by $271 million, or
3 percent, and we currently have one of the
most competitive operating cost structures in
our industry. We are committed to further
improving our position through our meaning-
ful continuous improvement efforts.
Through our Blue Cross and Blue
Shield affiliation, we offer access to the
largest network of doctors and hospitals in
the nation, with a leading cost structure,
innovative medical management programs
and capabilities, and strong customer ser-
vice. These assets have been the primary
driver of our continued success in National
Accounts. In fact, we expect 2011 to be the
tenth consecutive year of enrollment growth
in our National business.
Another market in which we continue
to grow is the Senior business. We recently
completed an annual open enrollment period
for our Medicare Advantage products, and we
expect to achieve moderate growth in all of
our Senior products in 2011. More impor-
tantly, 2011 marked the beginning of a sig-
nificant demographic change in our nation
with the first baby boomers turning 65. Over
the next 20 years, an estimated 1 million
baby boomers will age into the Senior market
each year in our Blue states. Our Blue Cross
and Blue Shield brand name is particularly
strong with this group of consumers. This
presents a substantial growth opportunity for
us, and we are well-positioned to benefit
from this movement.
There is also significant growth poten-
tial in the State Sponsored market. An esti-
mated 20 million individuals are expected to
enroll in Medicaid or related state programs
over the next decade as a result of changes in
program eligibility. States are also increasingly
evaluating the benefits that managed care can
bring to their Medicaid programs. Medicaid
managed care can be a positive solution for
many states, as health plans are often able
to lower state Medicaid costs while improving
the quality of care for program beneficiaries.
Given our strength with employer-
sponsored plans, the diversity of our business
and geography, the growth opportunities we
see in the Senior and State Sponsored mar-
kets, the potential for an improving economy
and other industry changes, we are optimistic
that we can grow membership organically
over the next several years.
ANGELA F. BRALY
Chair, President and Chief Executive Officer
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