CVS Health will re-enter the Affordable Care Act exchanges come January 2022, with CEO Karen Lynch calling the market sound and estimating it could comprise up to 15 million lives.
“It’s obviously stabilized over time thanks to some of the remedies put in place,” Lynch said.
Aetna announced it was leaving the exchange in 2018, along with other insurers unable to manage the rising costs of sick patients signing up for such coverage. Lynch said the company will reverse course, although it has not finalized what exchange markets it would reenter or the rates it planned to offer. Lynch said the ACA exchanges will represent the first time a branded CVS Health-Aetna plan will enter the market.
Lynch also said the company was in the midst of a pilot of its first virtual-first primary care plan with a national commercial customer. With the offering, Lynch said members initially interact with a virtual physician and, if their care requires further treatment, enrollees are then referred to a CVS Minute Clinic or specialist. Lynch said CVS expects to continue to roll the program out to other commercial customers.
“It’s a little too early to tell” what the cost savings are, Lynch said. “But we are expecting lower cost savings and pitching it to national account customers as a way to lower the cost of primary care.”
Meanwhile, the pandemic caused a 44.1% decline in profits during the fourth quarter for CVS, with net income falling to $975 million, down from $1.7 billion in 2019. Meanwhile, revenues rose 4% to $69.5 billion during the fourth year, up from nearly $66.9 billion the year prior.
For calendar 2020, revenue reached $268.7 billion, up 4.6% from $256.7 billion in 2019. Profits reached $7.1 billion, up 8.4% from $6.6 billion the year before.
In 2020, the company built up its Medicare relationships by 18.2% year-over-year, with senior members reaching 3.8 million. A lack of state eligibility redeterminations also pushed up the company’s Medicaid business 39.2% year-over-year to 2.7 million members.
CVS’ commercial business declined 4.7% year-over-year to 16.9 members, with the economic downturn caused by the COVID-19 pandemic leading to enrollee attrition.
During the call, she mentioned that CVS Health has administered 3 million COVID-19 vaccine doses in more than 40,000 long-term care facilities across the U.S., with plans to complete the second doses for nursing facilities by the end of the month. By mid-March, both doses should be complete at the assisted living facilities.
At 350 CVS retail locations, she said the company is administering 250,000 COVID-19 immunizations across 11 states weekly. She said the company currently can administer 25 million doses per month and continue to add stores as the vaccine supply increases.
Based on conversations the company has had with vaccine manufacturers, the company expects the Johnson & Johnson vaccine to be approved. Federal regulators are reviewing the vaccine efficacy data on Feb. 26. Between now and June, the Biden administration aims to administer 500 million doses of the vaccine.
“Obviously, the country needs it to get approved,” Lynch said, if the country aims to meet that goal.
While the company called vaccination diminutive to its enterprise profits since its startup costs were high, John Roberts, chief operating officer, said the vaccines’ real value may lie in company’s ability to collect patient data. The majority of the company’s vaccine appointments are scheduled online, allowing CVS to collect individuals’ email and phone numbers. “We do see an opportunity with vaccines and building relationships with new customers long-term,” Roberts said.