CVS Health signals re-entry into ACA marketplaces

CVS Health says its Aetna division will rejoin the Affordable Care Act (ACA) insurance marketplaces, where it plans to leverage new consumer relationships cultivated through its prominent role in the COVID-19 fight. Testing in the chain’s stores already has connected CVS with approximately 8 million new customers who provided contact information during digital appointment scheduling. The company’s growing role in the nationwide vaccination campaign is expected to boost that number significantly, as customers are offered services and encouraged to shop after getting immunized. Those new relationships, coupled with the company’s improved financial performance and greater stability in the ACA exchanges, drove the decision to re-enter the marketplaces in 2022. New CEO Karen Lynch says the new products will likely resemble plans currently sold under the Aetna Connected brand—which includes visits to CVS MinuteClinics with no co-pay, discounts on some store merchandise, and ties to CVS’ Health Hub offerings. CVS reported Tuesday fourth-quarter results that exceeded Wall Street estimates and offered guidance for 2021 that, at the high end, matched analysts’ expectations. For this year, CVS expects earnings per share of $6.06-$6.22. It predicted adjusted earnings per share of $7.39-$7.55, compared with the FactSet consensus of $7.54. In the fourth quarter of 2020, net income fell to $973 million, or 74 cents a share, from $1.75 billion, or $1.34 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share dropped to $1.30 from $1.73 but exceeded the FactSet consensus of $1.24. Total revenue rose 4% to $69.55 billion, above the FactSet consensus of $68.73 billion.