Hartford health insurer Aetna reports improved financials, parent CVS Health to close health clinics

Hartford Business Journal – Wednesday, October 29, 2025
By David Krechevsky

CVS Health’s third-quarter earnings report is a bit of a mixed bag.

The Woonsocket, Rhode Island-based company posted revenue and earnings Wednesday that beat analyst expectations, in part because of the improving financial performance of its Aetna insurance subsidiary.

For the quarter, CVS Health reported adjusted earnings per share of $1.60, well above the $1.37 per share expected by analysts. Total revenues increased to a record $102.9 billion, also above the $98.85 billion expected by analysts.

But the company still posted an overall net loss for the quarter of $3.99 billion, or $3.13 per share, a reversal from net income of $71 million, or 7 cents per share, in the same quarter last year.

In its earnings report, CVS said the overall quarterly loss reflects a $5.7 billion “goodwill impairment charge” related to the Health Care Delivery reporting unit, which has “continued to experience challenges which have impacted its ability to grow the business at the rate previously estimated.”

That unit, which is within its health services segment, includes Oak Street Health clinics, which CVS Health acquired for $10.6 billion in 2023.

CVS Health CEO David Joyner said Wednesday the company has decided to slow its clinic growth and close some “underperforming clinics.”

The company recently announced plans to close 16 Oak Street Health locations by the end of February next year.

When it was acquired by CVS Health, Chicago-based Oak Street Health, which focuses on Medicare patients, had 169 medical centers across 21 states, but none in Connecticut. It has since opened three Oak Street Health centers within existing pharmacy locations in Bridgeport, New Haven and Waterbury.

Joyner said the closings do not “change our views of value-based care,” adding that Oak Street Health is “actually performing according to plan.”

Despite the company’s quarterly loss, CVS’ key business segments — health care benefits (Aetna), health services (CVS Caremark) and pharmacy and consumer wellness (CVS Pharmacy) — also topped analysts’ revenue expectations for the quarter.

CVS Health said Hartford-based Aetna posted total revenues in the quarter of nearly $35.99 billion, up from $32.996 billion a year earlier. Adjusted operating income improved to $314 million from a loss of $924 million in the same quarter last year.

The improvement for Aetna, which like other major insurance companies has been struggling with higher medical costs, was attributed in part to improvement in its medical benefit ratio (MBR).

The ratio measures total medical expenses paid vs. insurance premiums collected. A lower ratio generally means an insurance company is collecting more in premiums than it is paying out in benefits.

Aetna’s ratio in the third quarter dipped to 92.8% from 95.2% in the same quarter last year. The improvement was “driven by the favorable year-over-year impact of premium deficiency reserves recorded as health care costs,” as well as “improved underlying performance in the government business,” CVS said.

“Government business” refers to Medicare Advantage and Medicare prescription drug, or Part D, plans.

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