Aetna drives CVS to $100B quarter as earnings soar
CVS Health reported strong first-quarter results Wednesday, with its insurance business, anchored by Aetna, showing meaningful improvement.
The healthcare giant posted adjusted operating income of $5.2 billion and earnings per share of $2.57, both up double digits from a year earlier. Revenue topped $100 billion, increasing more than 6%, driven by growth across all business segments.
Executives pointed to the performance of the healthcare benefits segment — which includes Aetna — as a key driver. Adjusted operating income in the unit rose to about $3 billion, reflecting improved medical cost management and favorable prior-year development. The medical benefit ratio came in at 84.6%, better than expected.
“Across CVS. Health, our teams remain focused on what matters most, improving affordability, reducing friction and delivering a more connected and seamless healthcare experience,” said David Joyner, chairman and CEO.
CVS said it remains on track to restore margins in its Medicare Advantage business, an area that has faced industrywide pressure from elevated medical costs and insufficient rate increases. The company reiterated confidence in reaching target margins by 2028, emphasizing a strategy focused on disciplined pricing and prioritizing profitability over growth.
Membership trends reflected ongoing strategic shifts. The company exited the individual exchange business, contributing to a sequential decline in total membership, though this was partially offset by gains in commercial enrollment.
CVS executives stressed that medical cost trends remain elevated, continuing to pressure the Medicare Advantage market. Still, they said recent rate updates from the Centers for Medicare and Medicaid Services signal incremental progress toward sustainability.
After initially announcing a flat rates in Medicare Advantage for 2027, the Centers for Medicare & Medicaid Services finalized a 2.48% average payment increase.
“At least the last couple of years the rates have not been supportive of the elevated medical trends,” Joyner said. “I think our team has proven in two consecutive years that we’ve been able to manage prioritizing margin over growth.”
Beyond Medicare Advantage, CVS highlighted strength in its commercial insurance business, citing solid retention, new business wins and disciplined pricing. The company said it is investing in care navigation, provider partnerships and technology tools to improve member engagement and reduce total cost of care.
Tennessee bill: ‘Going to raise costs’
Executives sharply criticized Tennessee legislation to limit pharmacy benefit managers such as CVS Caremark. The FAIR Rx Act, passed in April 2026, targets PBMs by prohibiting them from owning or controlling pharmacies to curb anti-competitive practices, such as unfair reimbursement rates. The legislation, which limits vertical integration, faces potential legal challenges.
“They really put politics and political interest over things that are much more rational,” said Prem Shah, executive vice president and group president of CVS Health. “The reality is the legislation’s going to raise costs for the state. It’s going to threaten access to pharmacies, which we already know there are challenges with some pharmacy deserts in specific parts.”
For 2026, CVS raised its adjusted earnings guidance to a range of $7.30 to $7.50 per share, up from its previous forecast. The company also increased its expectations for cash flow from operations to at least $9.5 billion.
On GLP-1s, Joyner noted that only about half of CVS clients cover use of the drugs specifically for weight loss. The high cost of GLP-1s, often exceeding $1,000 per patient per month, has become a major driver of medical cost trends.
“We still have a lot of clients that are actually discontinuing coverage for the obesity products of GLP-1s,” Joyner said. “This is where you ask the question, ‘How important is it?’ I think we actually have one of the most robust and or holistic solutions to GLP-1s because we’ve built an extensive and compelling direct-to-consumer solution for patients.”
Quarterly Highlights
- Aetna streamlined its prior authorization reform: standardizing data requirements for 88% of prior authorization volume, approving more than 95% of eligible prior authorizations within 24 hours, and processing 83% of prior authorizations in real time.
- CVS Health announced Health100, which will use Google Cloud’s AI technologies to deliver “a fully integrated health care engagement platform to provide a connected, proactive and personalized experience.”
- Medical membership totaled 26 million at the end of Q1, a decrease of about 600,000 members compared with Dec. 31, reflecting the company’s exit of the individual exchange business.
- Prescriptions filled increased 3.6% on a 30-day equivalent basis compared to the prior year, primarily driven by the company’s Rite Aid prescription file acquisitions.
By The Numbers
- Total Revenue: $100.4 billion ($94.6 billion in Q1 2025)
- Net Income: $2.96 billion ($1.78 billion in Q1 2025)
- Earnings Per Share: $2.57 per share ($2.25 in Q1 2025)
- Share Repurchases: None
- Dividend Declared: $0.665 per share
- Stock Price Movement: Shares rose more than 6% by midday Wednesday to $85.55
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