Carriers & the market
Aetna Reports Sharply Improved Medicare Advantage Cost Ratio in Second Quarter of 2026, Raising Full-Year Outlook
CVS Health said its Medicare Advantage business posted a medical benefit ratio of 87.4 percent in the second quarter of 2026, well below the crisis-level readings of late 2024, as the company raised its full-year financial guidance.
By the Goodsurance editorial teamAugust 1, 2026
CVS Health, the parent company of Aetna, reported second-quarter 2026 results on August 5, 2026, showing continued recovery in the financial performance of its Medicare Advantage segment.
The company's Health Care Benefits segment posted a medical benefit ratio of 87.4 percent for the quarter. That measure compares medical claims paid to premiums collected, and a lower reading generally signals a healthier financial margin. The ratio stood at 89.9 percent in the second quarter of 2025. In the third quarter of 2024, during the period of peak losses across many Medicare Advantage insurers, it had exceeded 95 percent.
Aetna's Medicare Advantage medical benefit ratio improved to 87.4 percent in Q2 2026, a significant recovery from the losses recorded in late 2024.
CVS attributed the improvement to disciplined premium pricing for 2026, a favorable mix of plan members, high Star ratings, and active management of medical costs. The company raised its full-year 2026 financial outlook and set a preliminary earnings floor for 2027, projecting growth of roughly 13 percent from the 2026 adjusted baseline. CVS said it entered 2027 Medicare Advantage bids assuming elevated medical cost trends would continue, signaling a cautious posture heading into the next plan year.
The turnaround at Aetna fits a broader industry pattern. UnitedHealth Group, Elevance Health, Centene, and Molina Healthcare have each reported improving Medicare Advantage margins over the past year, following a difficult stretch tied to higher-than-expected medical utilization and Part D benefit changes under the Inflation Reduction Act.
In plain words
Aetna, owned by CVS Health, reported its spring 2026 earnings on August 5. The key number for Medicare Advantage is the medical benefit ratio. It shows how much of each premium dollar went to paying for medical care. In the second quarter of 2026, Aetna spent about 87 cents on care for every dollar it collected. That is better than 90 cents a year earlier and much better than more than 95 cents in late 2024 when the company was losing money. CVS raised its financial outlook for the rest of 2026 and gave a preliminary target for 2027. The company said it was careful when setting 2027 prices because medical costs are still running high. Other big Medicare Advantage insurers like UnitedHealth, Elevance, and Centene have also reported better numbers lately after a tough stretch.
Understand the basics first
Source: CNBC
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