CVS Health Profits Hit $2.9 Billion As Firm Gets Handle On Aetna Costs

CVS Health Wednesday reported second quarter net income nearly tripled to $2.9 billion compared to the year-ago quarter as the company gets a better handle on rising costs in its Aetna health plans.

CVS, which owns the nation’s third-largest health insurance company in Aetna, said the company’s medical benefits ratio, which is the percentage of health plan premium spent on medical care, decreased to 87.4% compared to 89.9% in the year-ago period.

The financial performance convinced CVS executives to raise its diluted earnings per share guidance range to “$6.84 to $7.04 from $6.24 to $6.44” for the full year 2026, the company said. It’s the second consecutive quarter CVS has made such a move as chief executive officer David Joyner continues to turn the diversified healthcare giant around since he was promoted into the top job nearly two years ago.

“As our businesses work together to deliver a technology-powered care engagement experience, we continue to deliver strong performance,” Joyner said in a statement accompanying the quarterly earnings report. “We uniquely enable what our customers want the most: simple, connected and convenient access to affordable, quality healthcare, where, when, and how they want it.”

CVS said the drop in the medical benefits ratio, was “primarily driven by improved underlying performance in the government business and the absence of the premium deficiency reserve recorded in the prior year.”

Like other health insurers, CVS’ Aetna unit has been battling the rising medical expenses of its health plan members, particular among older adults covered by the company’s Medicare Advantage plans. In the third quarter of 2024, just before Joyner took over as CEO, the company’s medical benefit ratio was more than 95% largely driven by costs of enrollees in Medicare Advantage plans. Such plans contract with the federal government to provide health benefits available in traditional Medicare plus extra benefits and services to seniors including drug coverage, wellness programs and other coverage.

The industry and its analysts would prefer medical benefit ratios to be below 90% and into the mid 80s, where the industry was more than two years ago. Thus, CVS appears to have arrived as the company’s medical membership as of June 30, 2026 sat at 26 million health plan members and “remained consistent compared with March 31, 2026,” the company said.

Despite CVS’ decision last year to exit the individual health insurance business under the Affordable Care Act, also known as Obamacare, the company still grew its health care benefits segment. Total revenues in the company’s health care benefits segment grew 3.5% to $37.5 billion “driven by an increase in the government business, partially offset by a decline as a result of the company’s exit of the individual exchange business in 2026.”

The improvement helped CVS net income jump to $2.98 billion, or $2.31 per share, compared to $1.02 billion, or 80 cents per share, in the year-ago quarter. Meanwhile, second quarter total revenue grew more than 7% total revenues to $106 billion “driven by revenue growth across all operating segments.”

CVS also owns the nation’s largest drugstore chain with about 9,000 pharmacies and nearly 1,000 retail clinics and one of the nation’s largest pharmacy benefit management companies.

In the company’s health services segment, which includes the Caremark pharmacy benefit management company, total revenues increased 11.5% to $51.8 billion in the second quarter compared to the year-ago period “primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.”

And in the company’s pharmacy and consumer wellness segment,” CVS said total revenues “increased slightly” for the second quarter to $33.8 billion “primarily driven by pharmacy drug mix, increased prescription volume, including contributions from the company’s Rite Aid asset acquisitions which were completed during the third quarter of 2025, and brand inflation.”

“These increases were largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure,” CVS said in its earnings report.