Aetna will exit the individual markets in 2026, less than five years after making a return to this space.
The insurer’s parent company, CVS Health, released its first-quarter earnings report Thursday morning, noting that Aetna would withdraw from the Affordable Care Act’s exchanges where it independently operates plans in a move to improve business performance.
“This decision is consistent with others taken this year to focus the company’s portfolio,” according to the filing. “The company is best able to serve members through its other health benefit solutions, which offer access to quality care, affordable health benefits and exceptional service.”
Aetna’s history with the exchanges could be at best described as mixed. It was one of a number of plans that exited the space in 2018, amid massive losses in the early days of the market.
However, in 2021, then-CEO Karen Lynch told investors that the insurer intended to make a return to the individual market in 2022 as the sector stabilized. However, despite the boom in enrollment on the exchanges, sign-ups for Aetna plans were lower than expected out of the gate.
The company said in the earnings report that it had 27.1 million total members overall as of March 31, on par with the fourth quarter of 2024. Declines in ACA exchange and Medicare enrollment were generally offset by increases in commercial administrative service contract bookings.
Aetna has been a sore spot for CVS Health overall over the past year as it weathered many of the same headwinds that troubled its peers, namely rising utilization costs. In the first quarter, the company made some strides toward improvement, reporting a medical loss ratio of 87.3%.
This is down from 90.4% in the prior-year quarter, according to the report.
Overall, CVS reported $1.8 billion in profit for the first quarter as well as $94.6 billion in revenue. Both figures increased year over year, from $1.1 billion in profit and $88.4 billion in revenue for the first quarter of 2024.
The first-quarter results for both profit and revenue surpassed Wall Street’s estimates, per Zacks Investment Research.
Revenues at its pharmacy benefit management unit were up by 7.9% to $43.5 billion. CVS said this is due to growth in specialty pharmacy, drug mix and inflation on branded products. CVS is also one of several companies to partner with Novo Nordisk to boost access to its GLP-1 drug Wegovy and said it will give the product preferred formulary status, beginning July 1.
CVS Pharmacy signed on to be the first retail pharmacy to participate in the NovoCare pharmacy network, which will also make it easier for its customers to access Wegovy.
“This will enable CVS Pharmacy to provide convenient, safe and affordable access to Wegovy for eligible patients at its more than 9,000 community health locations across the country,” the earnings report said.
Thanks to the performance in the first quarter, the company boosted its earnings outlook for the year and now expects between $6 and $6.20 in earnings per share.