CVS Struggling with costs of Medicare Advantage plans

[Yipper]

After a big push into the Medicare Advantage business, CVS is apparently struggling wtih making it profitable. Gee, I wonder if this will drive up premiums and cause additional hurdles for getting access to specialists, advanced procedures, etc.?

Anyone on the CVS MA plans care to comment on your experience? To be clear, these are Aetna branded plans.

CVS Health chops 2024 forecast as cost struggles with Medicare Advantage persist | AP News

 

[Gotadimple]

This is to be expected. I can only speak for MA in Washington state. Aetna has been in the business of MA for a very long time. But what the article doesn't say is that CVS took a strategy to go directly after United Health Care for market share. They offer a $0 premium point of sale product. That means it is not an HMO and their list of providers is broad. They also offer HMO products. But the one thing all their products have is $0 premium, $0 deductible, drugs in tier 1 with $0 copay.

Like many other carriers there are two debit cards associated with the account: A flex card to pay for copays - funded quarterly. And a card to buy over the counter items. The catch is that you can only buy OTC items through CVS. Also funded quarterly. If you are healthy you won't be seeing the doctor so there are few co-pays, and you won't need a lot of OTC health items.

What does that mean? It means they are giving the coverage away. What does that mean for 2025? Premiums next year, for sure.

But the other issue is that CVS is having problems making a profit in its drug store business and has announced it will be closing stores, or stores in Target locations later in the year.

So overall, CVS just hasn't managed itself well.