CVS Health’s chief executive, David Joyner, said Aetna has improved its ability to predict medical spending after years of turmoil, according to remarks at a Washington, D.C., event last week. “We’ve got our arms around how to project and predict where healthcare costs are going,” Joyner said, noting the insurance division is now pricing products to match expected expenses. The comments come as CVS prepares to release second-quarter results, a move investors may view as a sign of stability after recent struggles.
Struggles in 2024 and a Pivot in 2025
Aetna faced significant challenges in 2024, reporting a $984 million operating loss compared to $3.9 billion in income the previous year. The division’s struggles cut CVS’ overall net income nearly in half, prompting the company to replace CEO Karen Lynch with Joyner in 2024. Joyner’s priority was stabilizing Aetna, which had expanded Medicare Advantage benefits aggressively to attract members—a strategy that backfired as costs surged.
Efforts to rein in spending began in 2025, with CVS reducing benefits and exiting unprofitable markets. The changes helped Aetna return to profitability, posting $1.8 billion in operating income last year. The company also scaled back Medicare Advantage offerings and left the Affordable Care Act market entirely for 2026 to manage rising costs. Despite these steps, some investors remained cautious, citing the difficulty of forecasting medical spending after pandemic-era disruptions.
Aetna’s 2026 performance has so far been solid, with executives stating they’ve taken a disciplined approach to pricing and benefit design. CVS raised revenue and earnings guidance after first-quarter results in May, and its stock has reached levels not seen since 2022. Joyner, who has testified before Congress four times since becoming CEO, faces ongoing scrutiny over Caremark’s role in drug pricing. The company’s next earnings report is scheduled for August 5.
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Current Performance and Future Outlook
Joyner’s remarks at the Economic Club in Washington, D.C., highlighted a shift in Aetna’s operational strategy, emphasizing data-driven adjustments to benefit design and pricing models. The insurer’s efforts to recalibrate Medicare Advantage programs included trimming coverage for high-cost services and narrowing provider networks in regions where utilization rates exceeded projections. These moves, while controversial among some consumer advocates, were framed by CVS executives as necessary to avoid repeating the financial losses of 2024.
The departure from the Affordable Care Act market for 2026 marked a strategic realignment, with Aetna focusing instead on expanding its Medicaid and employer-sponsored insurance segments. This decision followed a 2025 review that identified unsustainable premium growth in ACA plans, driven by rising drug costs and increased utilization of specialty care. By exiting the ACA market, Aetna avoided exposure to volatile subsidies and enrollment fluctuations tied to federal funding changes.
CVS’ pharmaceutical benefit manager, Caremark, has remained a focal point of regulatory scrutiny, particularly amid bipartisan efforts to reform prescription drug pricing. Joyner acknowledged that Caremark’s negotiation practices with manufacturers have drawn criticism, though the company maintains that its contracts are designed to balance cost containment with access to essential medications. The CEO’s frequent congressional appearances aim to clarify the complexities of pharmacy benefit management, a sector he described as “a linchpin of the broader healthcare system but often misunderstood by policymakers.”
