CVS Health Reports $4.6 Billion Profit Amid Rising Medical Costs

CVS Health reported a net income of $4.6 billion for 2024, down from $8.3 billion in 2023, as it faces rising medical expenses and a record medical loss ratio of 95.2%. The company has struggled to control costs due to increased patient claims, attributed to pent-up demand from the pandemic and changes in Medicaid eligibility. New CEO David Joyner is leading a turnaround initiative amid challenges across all business lines, with investor confidence shaken by missed earnings targets and share price declines exceeding 40% in 2024. Analysts highlight that CVS's issues reflect broader trends in the healthcare sector, where companies are under pressure to manage costs effectively. The company’s medical benefit ratio soared to 94.8% in the fourth quarter, a significant increase from previous years. Looking ahead, investors are eager for clarity on CVS’s strategies and projections for 2025 as it navigates these financial pressures.