* ACA is’ clearly ‘a big market’ – CEO
* See benefit from $ 400 million – $ 500 million from COVID-19 in 2021
* So far 3 million vaccines have been administered in the US (add CEO and analyst comments, vaccination details and update shares)
By Manas Mishra and Caroline Humer
February 16 (Reuters) – CVS Health Corp said on Tuesday it would return to selling individual medical insurance plans in the online markets created by the Acted Care Act (ACA), popularly known as Obamacare, and said the market has stabilized .
CVS Health’s Aetna insurance unit and other major health insurers such as UnitedHealth Group Inc abandoned these online exchanges in 2017 and 2018 due to financial losses and uncertainty because Republicans are targeting former US President Barack Obama’s signature law.
More than 11.4 million people signed up in 2020 for the plans, which provide government subsidies based on revenue.
“We’ve been studying the individual market for a while. Some of the drugs have been introduced. There’s clearly a big market,” Karen Lynch, recently appointed CEO of CVS Health, said during a post-earnings conference call.
The move by CVS comes when President Joe Biden told the U.S. Supreme Court last week that the ACA must be maintained and that Democrats are considering extending coverage to more people.
Lynch made the remarks during a conference call where the company said it expects an adjusted profit of 2021 between $ 7.39 and $ 7.55 per share, compared to $ 7.50 in 2020.
According to IBES data from Refinitiv, analysts expected earnings of $ 7.54 per share in 2021. CVS shares were down 4.7% to $ 70.68 in afternoon trading.
Michael Newshel, analyst at Evercore ISI, said the stock looks exaggerated as the 2021 financial outlook is in line with the company’s previous comments.
COVID-19
CVS said COVID-19 vaccinations and tests will contribute $ 400 million to $ 500 million next year.
The company has administered more than three million COVID-19 vaccines in long-term care facilities and now delivers 250,000 shots a week in its pharmacies under a broader federal program.
The vaccines are two-dose regimens observed for 15 minutes for each patient on the premises, adding to the potential for additional sales, the company said.
Lynch said it would increase the dose of vaccinations and thus expand more pharmacies and states in March or April if supply increased as hoped. It is planned to offer 20 to 25 million shots per month.
Alsen Lotvin, executive vice president of CVS, said during the conference that CVS estimates that approximately 500 million doses of vaccines are currently available through the end of June, based on discussions with pharmaceutical manufacturers.
Most vaccines are from Pfizer Inc / BioNTech SEand Moderna Inc. The U.S. Food and Drug Administration is currently considering a vaccine from Johnson & Johnson Inc. which can be approved in a few weeks, and Novavax Inc also hopes to apply to the FDA in the coming months.
On an adjusted basis, the company earned $ 1.30 per share in the reported quarter, beating the $ 1.24 per share estimate.