CVS Health, the parent of Aetna, likes its employer health plan business but is taking a tough approach to pricing, a company executive said Friday.
Steve Nelson, a CVS executive vice president and the president of the Aetna subsidiary, talked about Aetna’s commercial business, briefly, during a conference call with securities analysts.
“Our commercial business is strong,” Nelson said.
Aetna has had good luck with winning big national accounts, and Meritain, a division that administers health plans for self-insured employers, has also been doing well, Nelson said.
But, at fully insured plans, “we do see elevated trends,” Nelson said.
Aetna began to see medical cost trends rising in 2024, and “we took a disciplined approach,” Nelson said.
Nelson said the cost increases have put pressure on membership.
“But we’re going to stay disciplined in our pricing approach to fully insured,” Nelson said.
There’s “a lot of respect for the environment we’re in,” he added.
CVS held the conference to go over earnings for the second quarter, which ended June 30. The company streamed the call line and posted a link to a recording on its website.
What it means: Aetna does not plan to be a refuge for employers and benefits professionals seeking a refuge from rising employer health plan coverage costs.
The backdrop: Benefits brokers and health insurers like Cigna, Elevance and UnitedHealth have also talked about seeing high medical cost trends roughly in line with what they were forecasting at the beginning of the year.
A cooling economy could and federal government pressure on Medicaid and Medicare plans could make doctors and hospitals more eager to win employer plan business but put pressure on providers to try to make up for lost government plan revenue by increasing the prices they charge fully insured and self-insured employer plans in 2026.
The earnings: CVS, a company best known for its pharmacies, is reporting $1 billion in net income for the second quarter on $99 billion in revenue, compared with $1.8 billion in net income on $91 billion in revenue for the second quarter of 2024.
The company’s Health Care Benefits arm, which includes Aetna, is reporting $1.3 billion in adjusted operating income on $36 billion in revenue for the latest quarter, up from $938 million in adjusted operating income on $32 billion in revenue for the year-earlier quarter.
The company ended the quarter providing providing or administering medical coverage for 27 million people, or about as many people as it was covering a year earlier.