CVS Health’s Health Care Benefits segment, which includes Hartford-based Aetna Inc., was the primary driver of the improved results in the second quarter.
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CVS Health posted stronger-than-expected second-quarter results Wednesday, primarily due to continued improvement in the performance of its Aetna Inc. health insurance business.
The Woonsocket, Rhode Island-based healthcare company reported second-quarter revenue of $106.1 billion, up 7.3% from a year earlier. Net income nearly tripled to $3 billion, or $2.31 per diluted share, from $1 billion, or 80 cents per share, a year earlier.
CVS also increased its full-year adjusted earnings guidance to $7.90 to $8.10 per share, up from its previous forecast of $7.30 to $7.50.
The company's Health Care Benefits segment, which includes Hartford-based Aetna, was the primary driver of the improved results as CVS continues to recover from elevated medical costs that held down profits last year.
The segment's adjusted operating income climbed 85.5% year over year to $2.43 billion, while revenue increased 3.5% to $37.5 billion. The medical benefit ratio — the percentage of premium revenue spent on members' healthcare — improved to 87.4% from 89.9% a year earlier. Lower ratios generally indicate stronger profitability.
CVS said the improvement reflected stronger underlying performance in its government business, including Medicare Advantage, as well as the absence of a $471 million premium deficiency reserve recorded in the same quarter last year. Medical membership held steady at about 26 million consumers.
Chairman and CEO David Joyner said in a statement that as the company’s businesses work together “to deliver a technology-powered care engagement experience, we continue to deliver strong performance."
Despite the stronger outlook, CVS said it remains cautious about the second half of the year, citing continued elevated healthcare cost trends and potential macroeconomic headwinds.
