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HomeHealthCVS Health stock falls after warning on Medicare memberships

CVS Health stock falls after warning on Medicare memberships

Pharmacy chain operator CVS Health (NYSE:CVS) warned investors on Tuesday that its Aetna insurance unit can lose up to 10% of its membership base in its Medicare Advantage business as the company prioritizes margins.
CFO Thomas Cowhey made the remarks at the Bank of America Securities 2024 Health Care Conference, days after the company’s Q1 2024 financials disappointed Wall Street early this month.
During the quarter, CVS’ (CVS) Health Care Benefits segment, which includes the Aetna unit, witnessed a ~60% YoY decline in its adjusted operating income as its medical benefits ratio spiked amid rising Medicare utilization among its members.
“The goal for next year is margin over membership,” Cowhey said, adding, “and it used to be our mantra back in the Aetna days, and that’s what we’re going to do for next year.”
“But could we lose up to 10% of our existing Medicare members next year? That’s entirely possible. And that’s okay because we need to get this business back on track,” he added.

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