“We anticipate another year in which the overall cost of care will track above normalized levels driven by COVID-related treatment, vaccination, and testing costs,” Anthem Chief Financial Officer John Gallina said on a call with analysts.

Total medical costs during the fourth quarter of 2021 were higher than normal, but still came in better than the company’s expectations, executives said. Lower expenses for non-COVID care were partially offset by virus-related costs.

Shares of Anthem declined 1.7% to $431.73 at 10:17 a.m. in New York.

The company is also preparing for the potential end of the public-health emergency. That’s expected to bring changes to Medicaid programs, as states pare rolls that have swelled during the pandemic when they were limited in terminating members who may no longer be eligible for the safety-net program.

Anthem expects that to begin around the middle of 2022. The change is likely to lower insurers’ Medicaid membership, though some people may switch into other forms of coverage like Affordable Care Act plans.

Medicare outlook

Anthem executives said the insurer will grow its individual Medicare Advantage rolls by a double-digit percentage in 2022. The company also has a contract to manage Medicare benefits for New York City retirees that begins in April.

Rival Humana Inc. rattled health-care investors earlier this month when it cut its forecast for Medicare enrollment in 2022, citing sharper competition.

Anthem Chief Executive Officer Gail Boudreaux said the Medicare market is “a very consistent competitive environment” that hasn’t shifted significantly this year.

“It’s been a competitive market. It remains a competitive market,” she said.

Anthem’s Medicare Advantage business is smaller than Humana’s or those of UnitedHealth Group Inc. and CVS Health Corp., but it’s growing quickly. The company added about 431,000 Medicare Advantage members in 2021, a 30% increase that outpaced its other insurance lines.