CVS Health Wednesday reported first quarter net income of more than $2.9 billion as costs slowed for subscribers of the Aetna health plans the company sells, the company said May 6, 2026. In this photo is the CVS pharmacy logo displayed on a sign above a CVS Health Corp. store in Las Vegas, Nevada on February 7, 2024. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images)

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CVS Health Wednesday reported first quarter net income of more than $2.9 billion as costs slowed for subscribers of the Aetna health plans the company sells.

CVS, which owns the nation’s third-largest health insurance company in Aetna, said the company’s medical benefits ratio, which is the percentage of insurance premium spent on medical care, decreased to below 85% in the first quarter.

Health insurers historically have wanted that benefit expense ratio percentage in the mid to low 80s, but that’s been largely unachievable for most health insurers for the last year or so in part because insurers say Americans, particularly older adults in Medicare plans, have a pent up demand for healthcare following the Covid-19 pandemic when many patients delayed treatment.

In CVS’ case, the medical benefit ratio “decreased to 84.6% in the three months ended March 31, 2026 compared to 87.3% in the prior year primarily driven by improved underlying performance in the government business and the absence of the premium deficiency reserve recorded in the prior year, partially offset by lower favorable prior-year development,” the company said in its first quarter earnings report.

The improvement helped CVS net income jump to $2.96 billion, or $2.30 per share, compared to $1.78 billion, or $1.41 per share, in the year-ago quarter. Meanwhile, first quarter total revenue grew more than 6% to $100.4 billion “driven by revenue growth across all operating segments.” CVS also owns the nation’s largest drugstore chains that includes nearly 1,000 retail clinics and one of the nation’s largest pharmacy benefit management companies.

The financial performance triggered CVS executives to raise its diluted earnings per share guidance range to “$6.24 to $6.44 from $5.94 to $6.14,” the company said.

“CVS Health continues to provide what people want most from healthcare: a connected, convenient, cost-effective engagement experience across our unique collection of businesses,” said CVS chairman and chief executive officer David Joyner, who has been the company’s top executive for about a year and a half. “Our positive performance is driven by strong execution across our enterprise. We will continue to build momentum through delivering on our strategy and a steadfast focus on our purpose - to simplify health care one person, one family and one community at a time.”

Part of the Joyner-led recovery plan involved CVS exiting the business of selling individual health insurance under the Affordable Care Act, also known as Obamacare, for this year. That caused total medical membership to fall about 600,000 members to 26 million compared to the end of last year “reflecting the Company’s exit of the individual exchange business in 2026, partially offset by an increase in commercial ASC membership,” the company said. Medical membership was down more than 1 million from 27.1 million in the year-ago quarter.

Still, CVS’ health care benefits segment grew revenues by 3% in the quarter to $35.9 billion. Meanwhile, the company’s healthcare services segment, which includes the Caremark pharmacy benefits management company, reported an 11% increase in revenue to $48.2 billion “driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements,” the company said.

CVS, which also owns about 9,000 retail pharmacies, said revenue in its pharmacy and wellness segment was largely flat at $31.98 billion in the first quarter compared to $31.91 billion in the year-ago period.

“Total revenues remained relatively consistent for the three months ended March 31, 2026 compared to the prior year primarily driven by pharmacy drug mix, increased prescription volume, including contributions from the company’s Rite Aid asset acquisitions which were completed during the third quarter of 2025, and brand inflation,” CVS said. “These increases were largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.”