(Reuters) - U.S. health insurer Anthem Inc (N:ANTM) reported a better-than-expected profit as enrolments rose in its Medicaid plans, which cater to low-income Americans.
The company, whose proposed acquisition of rival Cigna Corp (N:CI) is being challenged by U.S. antitrust authorities, said overall memberships increased 3.2 percent in the second quarter.
Anthem's memberships have been rising in the past couple of years as more Americans sign up for its Medicaid plans expanded under President Barack Obama's Affordable Care Act.
Memberships in its government business, which includes Medicare and Medicaid plans, increased 6.5 percent.
Enrollment grew 572,000 in the Medicaid business, the company said on Wednesday.
However, Anthem's benefit expense ratio, which measures expenditure on claims against premiums earned, rose to 84.2 percent from 82.1 percent a year earlier, due to losses in its Obamacare individual insurance business. Higher membership in its Medicaid plans also pushed up medical costs.
Anthem said net income fell 9.1 percent to $780.6 million, or $2.91 per share in the quarter ended June 30.
Excluding items, the company earned $3.33 per share.
Revenue increased about 7.2 percent to $21.46 billion.
Analyst on average had expected earnings of $3.23 per share and revenue of $20.57 billion, according to Thomson Reuters I/B/E/S.