CVS Health Sees Surge in Net Income Amid Aetna's Medicare Advantage Recovery

CVS Health Corporation reported a significant surge in net income for the second quarter of 2026, reaching $2.995 billion—almost three times the $1.013 billion recorded in the same period last year. This rebound is primarily attributed to Aetna's recovery from previous medical cost pressures that had impacted performance in 2024 and 2025.

Total revenues for the quarter ending June 30, 2026, climbed by 7.3% to $106.1 billion, compared to $98.9 billion a year prior, fueled by growth across all three operational segments. Diluted earnings per share also saw a robust increase, rising to $2.31 from $0.80 in the corresponding quarter of 2025.

The Health Care Benefits segment, which encompasses Aetna, played a key role in this improvement. The medical benefit ratio improved to 87.4%, down from 89.9% the previous year. This is a marked turnaround from 2024's third quarter, before current CEO David Joyner took the helm, when Aetna faced a staggering medical loss ratio exceeding 95% due to rising costs among Medicare Advantage members. Revenues within this segment registered a 3.5% increase, totaling $37.5 billion, while adjusted operating income more than doubled, reaching $2.426 billion.

Due to this positive momentum, CVS has raised its full-year outlook for 2026, now forecasting total revenues of no less than $414 billion, up from its previous projection of at least $405 billion. Adjusted earnings per share guidance has similarly been uplifted to between $7.90 and $8.10, an increase from the earlier guidance of $7.30 to $7.50.

According to Joyner, "We uniquely enable what our customers want the most: simple, connected, and convenient access to affordable, quality healthcare, where, when, and how they want it." This reflects CVS's strategic focus on enhancing customer access and experience.

The Health Services segment, which includes the pharmacy benefit manager Caremark, generated revenues of $51.8 billion, marking an 11.5% growth. Meanwhile, the Pharmacy & Consumer Wellness segment achieved revenues of $33.8 billion, benefiting from the integration of Rite Aid pharmacy assets.

CVS has been expanding its integration of artificial intelligence within operations. Notably, Aetna's second-generation Claims Assist Manager platform has resulted in over a 20% reduction in processing time for complex claims that require manual review.

This year, CVS exited the individual ACA exchange market, a move that appears to align with a wider industry trend. As of July 30, 2026, seven insurers have announced plans to withdraw from the ACA marketplaces for the 2027 plan year. Notably, total ACA enrollment has already dropped 5%, now at 23.1 million, following the expiration of enhanced premium tax credits; the remaining pool has skewed older and sicker.

When one of the largest health insurers departs from the ACA market while bolstering its Medicare Advantage presence, it signals a preference for where the company anticipates future profitable growth over the coming years.

Separately, CMS has finalized changes to the Medicare Advantage Star Ratings system, eliminating disputed measures that insurers challenged, a shift that is projected to direct an additional $18.5 billion to Medicare Advantage and Part D plans over the following decade. Insurers like Humana, which contested call center metrics, may benefit from improved scores as the new methodology is implemented.

For brokers and benefits consultants navigating individual or small-group health coverage, the contrasting trends between ACA participation and Medicare Advantage convey practical implications for the upcoming open enrollment period. Clients depending on ACA coverage should brace for a decreasing array of competitive carriers. This contraction will likely coincide with rising premiums, as the remaining risk pool continues to deteriorate. In contrast, clients edging toward Medicare eligibility should be encouraged to discuss Medicare Advantage options earlier than usual, given the growing capital allocations by carriers in this area compared to the individual exchange market.

CVS's favorable medical benefit ratio coupled with its raised guidance suggests that the Medicare Advantage cost issues might be stabilizing for larger, well-capitalized carriers. This recovery, combined with the company’s decision to pull out from the individual exchange market, reflects a broader industry trend: insurers seem to be channeling investments into Medicare Advantage—where costs appear more manageable—while scaling back in the ACA marketplace where the risk pool continuously declines.

The future trajectory of this divergence will likely be influenced by the efficacy of CMS’s Star Ratings revisions and ongoing enrollment shifts within the ACA over the next several renewal cycles.