After completely existing the ACA exchanges in 2018, CVS Health said it would begin offering individual market plans again in 2022. Karen Lynch, who was recently promoted from president of Aetna to CEO of parent company CVS Health, cited market stabilization as the reason for the change.
Enrollment in individual market plans increased last year as the Covid-19 pandemic — and ensuing recession — pushed more people out of job-based insurance. Going into 2021, enrollment increased 6.6% through the federal exchanges compared to the previous year, according to preliminary data from the Centers for Medicare and Medicaid Services.
“Clearly there’s a big market, 10 million to 15 million people, that we aren’t participating in today,” Lynch said in a Tuesday investor call.
She didn’t confirm how many markets Aetna would enter, or which ones it would start with. The company will test out a co-branded CVS Health Aetna product, the first one since CVS closed its $70 billion acquisition of the insurer.
The insurer has also been testing out a health plan built around its retail clinics, where patients can have visits with no copay at its MinuteClinics. Aetna piloted the plan with employers in Kansas City last year, and saw membership increase from 4 million to 6 million going into 2021. It expects to add 15 markets this year and also began offering the plan to Medicare patients.
In its small group plans where this benefit was offered, MinuteClinic visits increased 25%, Lynch said.
“So, it is an indication that people are using MinuteClinic or interested in using it with that copay design,” she added.
Aetna’s overall enrollment increased last year, but its commercial membership actually decreased slightly, from 17,750 to 16,902.
An opportunity in testing, vaccines
Overall, CVS saw revenues rise last quarter, driven by Covid-19 testing and increase prescription volumes, but profits fell by more than 44% compared to 2019. CVS attributed this decrease to investments related to the pandemic, testing and treatment costs.
For all of 2020, the company reported $268.7 billion in revenue, a slight increase from 2019. The company’s net income of $7.2 billion for the year was up 8% from the prior year.
Because the U.S. government tapped CVS to help administer Covid-19 tests, and now vaccines, the company sees an opportunity to bring in more customers over the longer term.
So far, the company has 4,800 sites across the U.S. where it has administered 15 million tests. CVS was also tapped to help administer vaccines in 40,000 long-term care facilities, though it and Walgreens have come under fire for the slow pace of vaccine administration in nursing homes and assisted living facilities. CVS said that it has distributed more than 3 million doses to date.
For vaccinating the general public, retail pharmacies will also have a role under the Biden Administration’s Federal Pharmacy Partnership Program. CVS said it would be tasked with administering 250,000 shots each week at its stores in 11 states.
“We do see an opportunity with the vaccines and building relationships with new customers to convert them to long-term CVS Health customers,” CVS COO Jon Roberts said in an investor call, such as giving them shopping passes to onboarding them to CVS’ paid membership program, CarePass.
Because most people are registering for their testing or vaccine appointment online, “We have their email. We have their text message and we have the ability to communicate with them regularly,” he said. “So I would think of it beyond just the add-on front store. I would think about it as adding new customers to the CVS channel and getting their pharmacy business plus their front store business.”
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