Aug 5, 2021 - Health

The pandemic is now a "negative" for CVS

Data: Company filings; Chart: Axios Visuals

For every premium dollar that CVS Health's insurance arm, Aetna, collected in the second quarter, it paid a little more than 84 cents to medical providers — a "medical loss ratio" that was a lot higher than Wall Street expected.

The big picture: Health insurers were the main beneficiaries of the pandemic last year, as the widespread delay of doctor visits and procedures greatly offset what they had to pay for COVID-19 hospitalizations.

Now that routine care is back, and COVID-19 hospitalizations are on the rise again, CVS executives said the pandemic is a "modest negative" for the rest of 2021.

What to watch: Insurers typically pay out more in medical claims as the year drags on, because more people meet their deductibles and out-of-pocket maximums.

  • Wall Street analysts expect CVS' medical loss ratio to reach 84.7% in the third quarter and 86.1% in the fourth quarter, according to FactSet.
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