Aetna returned to the Affordable Care Act's exchanges for the 2022 plan year, and while the market is booming, executives said enrollment in its initial offerings was lower than anticipated.
CVS Health CEO Karen Lynch said on the company's earnings call Wednesday morning that enrollment was "lower than expected" in its exchange plans across the eight states it re-entered. She said Aetna will continue to focus on price discipline as well as brand recognition for its co-branded plans with CVS.
"We continue to build this business gradually with select geographic expansion, a focused price discipline and the appeal of co-branded Aetna-CVS Health offerings," she said.
Aetna pulled out of the exchanges in 2018 following massive losses, however, the marketplaces have stabilized over the past several years and become more attractive to skeptical insurers. In addition, the Biden administration backed a lengthy special enrollment period on the exchanges related to the pandemic, which drove record membership in exchange plans for this year.
While Aetna's first year back in the marketplaces may have disappointed, the insurer was a winner during the enrollment period for Medicare Advantage, Lynch said. MA enrollment was a mixed bag for some payers, such as Humana, which slashed enrollment growth expectations and is launching a significant value creation effort to reinvest in the MA products.
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Lynch said Aetna added 295,000 net new members during the annual enrollment period, growth of 11.6% that outpaces the national average. She said the insurer saw growth across all of its Medicare products, including dual eligible special needs plans.
"We had an impressive annual enrollment period," Lynch said. "For the second consecutive year, we grew all Medicare products lines and our growth rates this year exceed the industry average in all categories."
CVS Health posted $1.3 billion in profit for the fourth quarter of 2021, up from $973 million in the prior-year quarter.
The results surpassed Wall Street analysts' expectations, according to Zacks Investment Research. CVS also beat the Street on revenue, reporting $76.6 billion for the quarter. That's up from $67 billion in Q4 2020, according to the company's earnings report released Wednesday.
For the full-year 2021, the healthcare giant reported $278.9 billion in revenue and $7.9 billion in profit, according to the report. Those figures also represent significant increases from 2020, when the company reported $268.7 billion in revenue and $7.2 billion in profit.
“We’re engaging millions of customers across our businesses and in our community health destinations, becoming an even bigger part of their everyday health," Lynch said in a statement. "That’s clearly reflected in our performance, but more importantly in our potential.”
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Through its retail pharmacies, CVS has been a critical player in administering both COVID-19 vaccinations and tests. In 2021, it provided more than 32 million tests and 59 million vaccines, according to the report.
In just the fourth quarter, CVS administered 8 million tests and 20 million vaccinations, the company said. CVS' retail segment significantly outperformed the company's expectations in the fourth quarter as demand for tests skyrocketed with the spread of the omicron variant, as did demand for vaccine boosters.
Total medical membership at Aetna, the company's health plan, was 23.8 million at the end of 2021, up from 23.4 million at the end of 2020.
Thanks to the results, CVS affirmed its earnings guidance for 2022 of between $8.10 and $8.30 in earnings per share. The company did adjust its cash flow from operations estimate to between $12.5 billion and $13 billion.