Hartford-Based Aetna to Exit Health Insurance Exchanges Nationwide
CVS Health announced on Thursday that its subsidiary, Aetna, plans to pull out of the Affordable Care Act health-insurance exchanges across the United States next year. The decision comes as CVS Health reported improved first-quarter results for Aetna, with adjusted operating income reaching approximately $2 billion, up from $732 million in the same period last year.
CVS Health President and CEO David Joyner explained during the company’s quarterly earnings call that the decision to exit the exchanges was due to the continued underperformance of Aetna’s individual exchange products. Joyner stated, “We’re disappointed by the continued underperformance from our individual exchange products, and recently determined there is not a near- or long-term pathway for Aetna to materially improve this position in this product.” Aetna currently offers ACA health plans in 17 states, with around 1 million enrollments.
The move comes amid reports that the Trump administration plans to target ACA expansion as part of its efforts to cut billions from the Medicaid budget. Despite the improved quarterly results, Aetna continues to shed jobs at its Hartford headquarters. CVS Health informed the state that it would cut an additional 55 jobs reporting to Hartford after deciding to shut down its CareFree insurance plan. This brings the total number of layoffs at the Hartford headquarters to over 700 since December.
CVS Health’s total revenues for the first quarter increased to $94.6 billion, representing a 7% growth compared to the previous year. However, the company expressed concerns about potential future challenges, including the impact of tariffs imposed by the Trump administration on pharmaceuticals and other medical supplies. Joyner noted that new tariffs could affect both CVS Health’s retail store offerings and drug supply chain.
The company is also cautious about the potential impact of vaccine skepticism within the Trump administration on its immunization business. This week, the administration requested a new clinical trial for an updated strain of Novavax’s COVID-19 vaccine, which is already in widespread use. “We anticipate volume impacts depending on government action,” Joyner said regarding CVS Health’s immunization business.
Despite these challenges, CVS Health’s retail business is expected to perform well in 2025. The company’s decision to exit the health insurance exchanges marks a significant shift in its strategy, focusing on areas with more potential for growth and profitability.
