4Q Results for CVS’s Aetna, Humana Show Signs of Medicare Advantage Stabilization
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Feb 20, 2025
Despite a solid year of elevated medical cost trends that resulted in financial losses, recent guidance and commentary from two leading Medicare Advantage insurers sparked cautious optimism from the investment community. Reporting preliminary results from the 2025 Annual Election Period (AEP) that were largely in line with expectations, both CVS Health Corp. and Humana Inc. indicated that softening their competitive positioning in exchange for manageable growth will aid in margin recovery.
For the quarter ending Dec. 31, 2024, CVS Health reported adjusted earnings per share (EPS) of $1.91, which represented a year-over-year decline of 44% but came in well above Wall Street’s projections of 91 cents. The Health Care Benefits segment, which houses Aetna’s insurance business lines, reported a medical loss ratio (MLR) that was slightly better than expected at 94.8% for the quarter and 92.5% for the full year. That was higher (worse) than the 2023 MLR of 86.2%, when elevated medical cost trends had not yet fully materialized.
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