Health Plan Weekly

High MA Utilization Spurs CVS 1Q Earnings Miss, Selloff

  • May 03
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    May 03, 2024

    CVS Health Corp.’s poor Medicare Advantage results in the first quarter of 2024 made the diversified health care and retail company the object of Wall Street’s ire. Analysts were highly critical of the firm’s performance, and the company’s stock price declined sharply on May 1, the day that the results were released. 

    CVS Chief Financial Officer Thomas Cowhey said during a May 1 earnings call that CVS’s MA segment is poised to “lose a significant amount of money this year.” 

    CVS’s MA care utilization was notably high, even compared to other listed insurers, who have also had to muddle through high utilization in MA over the past year. According to a press release on the firm’s first-quarter results, medical loss ratio (MLR) for the entire health benefits division during the quarter was 90.4%, up 5.8% year over year.  

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    • Peter Johnson

    Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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