Worries persist about CVS Health

HARTFORD -- This week, the CEO of CVS Health expressed confidence that the company would turn around its embattled health-insurance business, the Hartford-based Aetna. But some in Connecticut who follow the company are much less bullish.

CVS' reputation in Connecticut has been dented by its elimination in the past year and a half of more than 1,000 jobs connected to its offices in Hartford, including several hundred positions in the past couple of months. The layoffs have incensed a number of elected officials, and some of them want more information about the company's long-term plans in the state.

"People used to refer to Aetna in Connecticut as 'Mother Aetna.' They were always present and engaged. It was a balance of work and corporate responsibility. We don't see that anymore," state Sen. Tony Hwang, R-Fairfield, the ranking Senate member of the state legislature's Insurance and Real Estate Committee, said this week. "These kinds of transactions in which we get the bare minimum of information, while they do not fully share their plans and vision, is a great cause of concern."

New earnings show Aetna's predicament

CVS' earnings report for the past quarter and year released on Wednesday highlighted its challenges -- particularly the headwinds facing the division that includes Aetna.

In CVS' health care benefits business, revenues last year jumped 24% year over year, to about $130 billion. During the same time frame, the division's number of members increased 5% to approximately 27 million.

Despite the growth, the division sustained an adjusted operating loss of $439 million in the fourth quarter of 2024. It recorded a profit of $307 million for all of 2024, but that was a small fraction of its $5.6 billion profit in 2023. Company officials attributed the quarterly loss and plunging annual profit mainly to "increased utilization," the "unfavorable impact" of the federal government's 2024 star ratings for the company's Medicare Advantage plans, as well as "higher acuity" in Medicaid. Acuity generally refers to the level of care that a patient needs.

"We've spent a lot of time focusing on Aetna, and we've actually delivered material progress in terms of stabilizing Aetna's operation and also bringing the financial discipline back to the organization," CVS CEO and President David Joyner said Wednesday during the company's latest quarterly earnings call.

Joyner, who previously served as the company's president of pharmacy services and started his career as an Aetna employee-benefits representative, was appointed CEO in October. He replaced Karen Lynch, who had held the top post since February 2021. Lynch departed about two months after the company announced the exit of Aetna head Brian Kane, who had served less than a year in that position.

Overall, the Woonsocket, Rhode Island-headquartered company's 2024 revenues increased 4% from 2023, while its annual profit plummeted 45% year over year. The company's other main businesses are health services, which include pharmacy benefit management and medical clinics, and pharmacy and consumer wellness. Based on its 2023 revenues, CVS ranked No. 6 in the Fortune 2024 list of the largest corporations in the U.S.

Investors appeared to be encouraged by the latest results. CVS' stock price closed Wednesday at about $63, a 15% jump from its closing total on Tuesday. The company's share price has reached a 52-week high of about $81 and fallen to a 52-week low of around $44.

Hundreds of layoffs at Hartford hub

CVS' downsizing drive in Connecticut started a year and a half ago. In August 2023, the company announced that it planned to lay off between October and December 2023 more than 500 employees who were based at or reported to the company's offices at 151 Farmington Ave., in the Asylum Hill section of Hartford. Those job cuts affected employees in a range of departments, with most of them analysts, directors, managers or vice presidents.

A number of elected officials, including Hwang and U.S. Sen. Chris Murphy, condemned the layoffs.

"The layoffs announced today at CVS are more evidence that the recent massive consolidations in the health care industry are bad for both workers and consumers," Murphy, who is a member of the Senate Committee on Health, Education, Labor and Pensions, said in a written statement at the time. "Over and over again, we see health care mergers ultimately lead to significant job loss, higher costs for patients or worse quality of care. It's past time we take a closer look at who really benefits from these deals."

Murphy's mention of mergers was an apparent reference to CVS' approximately $70 billion acquisition of Aetna in 2018.

CVS' job cuts extend beyond Connecticut. Last September, the company announced that it planned to eliminate about 2,900 positions across the organization, mainly affecting corporate roles. That round of job reductions, which equate to less than 1% of CVS' workforce, are part of a multi-year effort to deliver $2 billion in savings by reducing expenses and investing in technology to improve how the company operates, CVS officials said.

"Our industry faces continued disruption, regulatory pressures and evolving consumer needs and expectations, so it is critical that we remain competitive and operate at peak performance," the company said in a statement at the time.

Between early December 2024 and early January 2025, CVS cut approximately 400 positions connected to the offices in Hartford. Between January and June 2025, the company has made or scheduled about 250 additional layoffs affecting employees based at or reporting to the Hartford offices, according to the layoff notices it has sent to the labor department.

Since October 2023, CVS company has made or announced about 1,250 layoffs affecting the Hartford offices. The affected employees include about 480 Connecticut residents.

"Every time there's a crisis, it's an opportunity for companies to restructure and change things," Resul Cesur, a professor of health care economics at the University of Connecticut, said in an interview.

Despite the job cuts, the agreement that CVS made with state officials in October 2018 remains intact. The terms include a commitment by the company to keep Aetna's headquarters in Hartford until at least 2028. CVS will not receive any state funding as part of the pact.

The company signed the accord shortly before completing its acquisition of Aetna. In January 2018, a few weeks after CVS' plan to acquire Aetna was announced, Aetna officials confirmed they had abandoned their exploration of the potential relocation of Aetna's headquarters to Manhattan.

"CVS remains in compliance with terms of its 2018 pledge, and that includes its continuing commitment to keeping Aetna's headquarters in Hartford," Connecticut Insurance Department spokesman Jim Carson said this week. "The Insurance Department's focus and primary responsibility is the oversight of the financial health and operational integrity of the regulated entity, Aetna. The Insurance Department will continue to work with CVS as a good corporate citizen to ensure that any operational changes support the company's solvency and obligation to its policyholders."

Hartford Mayor Arunan Arulampalam said he is also tracking the situation.

"I have been in direct communication with CVS leadership to emphasize the importance of preserving jobs here in Hartford and ensuring that our residents have access to stable, meaningful employment," Arulampalam said in a statement. "While we cannot influence every corporate decision, we remain committed to fostering an environment where businesses can thrive and grow. My administration will continue to advocate for Hartford workers and explore ways to support those impacted by these changes."

Despite the involvement of local and state officials, some key questions remain unanswered. Since starting the layoffs in 2023, CVS has repeatedly declined to comment on how many employees are based at or report to the offices at 151 Farmington Ave.

As part of the 2018 agreement, CVS committed to keeping Aetna's head count in Connecticut at approximately 5,300 people for the next four years. It fulfilled that condition and reported a contingent of 5,348 in-state Aetna employees, as of Nov. 28, 2022, according to insurance department officials. It has not provided updated head counts to the department since then.

Messages left this week for a CVS spokesperson that inquired about the current number of Aetna employees in Connecticut and the company's long-term plans for the Hartford offices were not returned.

Overall, CVS had nearly 9,000 employees based in Connecticut, as of December, according to data provided by the company. With that total, which includes employees who work at the 170 CVS Pharmacy locations across the state, the company still ranked among the 10 largest private-sector employers in the state.

"They're not breaking out the Aetna job numbers from the pharmacy job numbers, which are a totally different set of employees and impact," Hwang said. "I've gotten no clarity with regards to their long-term plans in Connecticut."