CVS raises expectations for enrollment in some Medicare plans

(Reuters) -CVS Health said on Friday it expects enrollment in its fast-growing Medicare Advantage plans for people aged 65 and above to exceed its previous targets in 2024 helped by strong new sales and member retention.

The healthcare conglomerate, which owns health insurer Aetna, said it expects to add at least 800,000 members to its Medicare Advantage plans this year, versus its previous forecast of adding 600,000 people in 2024.

Medicare Advantage plans differ from traditional Medicare as they are offered by private insurers and are paid a set rate to manage healthcare for people aged 65 and older or with disabilities.

Aetna competes with larger rivals UnitedHealth and Humana in the Medicare Advantage market.

CVS' plans benefited from favorable "star ratings" from the Centers for Medicare & Medicaid Services, which determine reimbursement levels and can sway enrollees in choosing plans.

CVS, in a regulatory filing, reaffirmed its 2024 adjusted profit forecast of at least $8.50 per share. The company also expects 2023 profit at the higher end of its previous range of $8.50 to $8.70 per share.

Analysts on average expect adjusted profit of $8.59 per share in 2023, according to LSEG data.

CVS had tempered its 2024 earnings forecast in November to account for potentially higher medical costs at its insurance unit as older adults increasingly avail healthcare services deferred during the pandemic.

Separately on Friday, the company formally appointed Tom Cowhey as its chief financial officer, who held the position on an interim basis since October.

Cowhey's predecessor Shawn Guertin, who has been on leave of absence since October, will leave the company on May 31, 2024.

(Reporting by Bhanvi Satija in Bengaluru; Editing by Shilpi Majumdar)