Blue Cross provider Anthem ( ATH) said second-quarter earnings rose 34% from a year ago thanks to higher membership, fewer defections and companywide cost-controls. The Indianapolis health maintenance organization earned $237.9 million, or $1.66 a share, in the latest quarter, compared with earnings of $177.3 million, or $1.25 a share, last year. The latest quarter included a net realized investment gain of 1 cent a share. Revenue rose 11.5% to $4.53 billion. Analysts surveyed by Thomson First Call had been forecasting earnings of $1.64 a share on revenue of $4.58 billion in the latest quarter. Anthem's medical enrollment rose 8% from a year ago to more than 12.6 million at June 30, 2004, reflecting membership gains in both big and small accounts nationwide. The jump in revenue reflected "disciplined pricing and solid membership gains, partially offset by a shift in business mix toward more self-funded health care products," the company said. Anthem also responded to the California insurance commissioner's efforts to block its proposed merger with WellPoint ( WLP), saying it plans to "promptly initiate appropriate legal proceedings to challenge it." "In addition, we will consider other options that may be available to us in order to complete the merger," the company said.