August 6, 2026

CVS Health reported a strong second quarter, with net income nearly tripling to $3 billion, driven by a significant turnaround in Aetna’s insurance business as Medicare Advantage profitability improved following benefit changes and market exits. The company raised its 2026 earnings outlook, while its pharmacy, PBM and retail business also posted strong results, supported by Rite Aid acquisitions and continued growth in GLP-1 weight loss drug offerings.

CMS finalized a 2.3% increase in Medicare inpatient hospital payments for 2027, adding an estimated $2.1 billion in funding, though hospital groups argued the increase is insufficient to cover rising care costs. The rule also establishes a nationwide mandatory joint replacement payment model beginning in 2028, along with updates to hospital quality reporting measures, including expanded use of Medicare Advantage patient data and new outcome metrics.

The settlement announced by the Department of Justice on Monday puts to rest a whistleblower lawsuit that said Complete submitted false diagnosis codes for its senior patients to increase its reimbursement in the privatized Medicare program from 2020 to 2023. The settlement shows regulators’ commitment to combating profiteering in MA, a hot-button issue as the program expands to more Medicare seniors.

The trend has surprised hospital executives, who said they expected more Americans to choose cheaper health plans with higher out-of-pocket costs or switch to other forms of insurance after ACA cuts last year caused many premiums to skyrocket. Instead, most of those who dropped their ACA plans seem to be forgoing insurance entirely.

The proposed 2027 rate increases underscore the continued affordability challenges facing ACA exchange enrollees and highlight the growing financial pressures impacting health insurers nationwide.