Updated: Aetna to Exit Individual Exchange Business

In 2026, CVS Health decided to exit the individual exchange business where Aetna independently operates. The announcement was made during CVS Health’s first-quarter earnings call this morning.

CVS Health’s total revenue in the first quarter of 2025 increased 7.0% over the first quarter of 2024, which company executives said was driven by revenue growth across all segments.

Within the healthcare benefits segment, total revenue increased 8.0% for the three months that ended March 31, 2025, compared with the prior year. The company said this result was primarily driven by increases in the Medicare product line, including the impact of improved Medicare Advantage star ratings for the 2025 payment year.

The company’s medical benefit ratio decreased to 87.3% in the first quarter of 2025 compared with 90.4% in 2024. This was the result of improved performance in Medicare, including the impact of improved Medicare Advantage star ratings for the 2025 payment year.

But during the first quarter of 2025, CVS Health recorded a premium deficiency reserve of $448 million within its individual exchange business. Company executives said this is related to anticipated losses for the 2025 coverage year. The $448 million premium deficiency recorded was comprised of $17 million of operating expenses related to the write-off of unamortized acquisition costs and $431 million of healthcare costs.

The company is projecting between $350 million and $400 million in losses for the full year 2025, Thomas F. Cowhey, executive vice president and chief financial officer, said during the earnings call.

As a result, company executives made the decision to exit the healthcare exchanges offered through the Affordable Care Act.

David Joyner

“We're disappointed by the continued underperformance of our individual exchange products and have recently determined there is not a near- or long-term pathway for Aetna to materially improve its position in this product,” David Joyner, CVS Health president and CEO, said during his prepared remarks. “This is not a decision we made lightly. We recognize the importance of this product to millions of members, but this action will allow us to focus on areas we will have the strongest capabilities, including Medicare and Medicaid, where we continue to build on our ability to serve members and customers in a differentiated way.”

This follows the company’s move in March 2025 to shut down its ACO REACH program and sell its Medicare Shared Savings Program (MSSP) to Wellvana. The Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH program) is a pilot program launched by CMS in February 2022 to pilot efforts to offer risk-sharing programs with providers in traditional Medicare.

Company executives said these moves are part of efforts to strengthen CVS Health’s business for sustainable earnings, with a focus on Medicare Advantage and Medicaid businesses. Cowhey pointed out that its first-quarter results were driven by improved performance in Medicare.

“As you look at the core Medicare trends, they're running consistent and slightly better than our outlook,” he said.

The company has a multiyear path to return Aetna to its target margins, Steve Nelson, executive vice president and president at Aetna, said during the question-and-answer period of the earnings call.

“While it’s very early in that journey, the progress is very encouraging,” he said. “We have a strong market position in Medicare Advantage, and we’ve had success. It has not been immune from the elevated trend. There aren’t as many levers to pull there, but we are going after clinical opportunities aggressively, and we are also going to be introducing some rate actions. We hope that will mitigate some of the pressure.”

This story was updated to include additional information from CVS Health’s earnings call with investors.