CVS Health reported stronger than expected first-quarter earnings on Thursday, in part because of the improved performance of its subsidiary, Hartford-based health insurer Aetna Inc.
For the quarter ended March 31, the Woonsocket, Rhode Island-based company reported adjusted earnings per share of $2.25, well above the $1.70 per share analysts had expected and a strong improvement from $1.31 for the same quarter last year.
Unadjusted, CVS Health reported net income of $1.78 billion, or $1.41 per share, for the first quarter, compared to net income of $1.12 billion, or 88 cents per share, a year earlier.
Its Aetna unit reported that total revenues increased 8% during the quarter from a year earlier, with adjusted operating income increasing by $1.3 billion. The company said the increases were driven by increases in its Medicare product line, but were offset by a premium deficiency reserve of $448 million within its individual exchange product line related to anticipated losses for the 2025 coverage year.
CVS Health also announced that Aetna will exit the Affordable Care Act (ACA) exchange business. Aetna serves approximately a million enrollees in 17 states, though none in Connecticut. The company said Aetna is “best able to serve members through its other health benefit solutions.”
CVS Health said Aetna will continue to serve its exchange members through the end of 2025 “and residual activities in 2026.”
The company said that, overall, medical membership as of March 31 was 27.1 million, relatively consistent when compared with Dec. 31, but reflecting membership declines in the individual exchange and Medicare product lines.
The company also said that CVS Caremark is partnering with Novo Nordisk to significantly increase access to Wegovy, a GLP-1 drug commonly used for weight loss, for its members at a more affordable price beginning on July 1.
CVS, which has approximately 9,000 retail pharmacies nationwide, will offer Wegovy at a cash price of $499 a month for those who pay out of pocket.
CVS said it will enhance the value of these medications by combining them with additional lifestyle clinical support as part of the CVS Weight Management program offered to clients through CVS Caremark.
CVS reported its first quarter earnings as it continues to trim staff at its Aetna insurance unit in Hartford.