CVS Profits Surpass $2 Billion As Health Plans Add 1.1 Million Members

CVS Health reported more than $2 billion in quarterly profits buoyed by more than 1 million new health plan members and revenue growth in all of its businesses from health benefits to drugstores, the company said Wednesday.

CVS reported first quarter net income of $2.14 billion or $1.65 a share compared to $2.35 billion or $1.77 cents in the year-ago quarter. CVS sales jumped 11% to $85.3 billion in the company’s first quarter, compared to $76.8 billion.

CVS, which owns the nation’s third-largest health insurer in Aetna, said the increase in revenue got a boost from health plan membership, which increased by 1.1 million members to 25.5 million as of March 31, 2023, “reflecting increases across all product lines including an increase of approximately 900,000 members related to the individual exchange business within the Commercial product line.”

The growth in individual exchange business, also known as Obamacare, comes after CVS expanded into several new states to sell such coverage. That helped revenue in CVS’ health care benefits business increase by 12% to $25.8 billion in the first quarter.

Still, CVS lowered its financial outlook for the rest of 2023 amid the costs of its recent acquisitions of Signify Health, which the company is paying $8 billion for, and Oak Street Health, which CVS is spending more than $10 billion to buy. The Oak Street deal, which closed earlier this week, adds a large network of doctor-staffed clinics primarily used by seniors to CVS’ portfolio of health services.

“We delivered another strong quarter while executing on the strategy we outlined in December 2021, leading to the close of the Signify Health acquisition followed quickly by Oak Street Health,” CVS Health chief executive Karen S. Lynch said. “These additions are core to our strategy and will help unlock future growth as we push further into value-based care, which prioritizes keeping people healthy.”