Aetna’s two-year financial turnaround has taken hold following a leadership overhaul, thousands of ongoing cost management initiatives and a margin recovery plan expected to complete by 2027.
“Once you get the fundamentals in place, you start getting credibility, not only with investors, but internally with our employees, and then, in particular, with our members,” Aetna President Steve Nelson said Sept. 9 at the Wells Fargo Healthcare Conference. “We can be a little more disruptive and innovative. Aetna has a legacy of being innovative in terms of product and clinical programs, and we are getting back to that.”
The insurer has spent the past two years in recovery mode after a period of financial turmoil driven by Medicare Advantage cost pressures, previously unfavorable star ratings and major losses in the ACA business, which it exited for 2026. Mr. Nelson, who also serves as executive vice president at CVS Health, was tapped to lead the insurer in late 2024.
In CVS Health’s second quarter results, Aetna’s adjusted operating income surged 85.5% year over year to $2.4 billion, and the company raised its full-year earnings guidance for the second time this year.
“I have seen more progress, honestly, in healthcare in the last couple of years than I have seen in the last decade,” Mr. Nelson said. “We are going to hit the gas on that, and as the enterprise, CVS Health, we have a lot of assets to bring to this.”
Five more updates:
1. Mr. Nelson said 12 of 13 senior executives at Aetna are either new to their role or new to the company in the past two years.
2. Aetna has 2,000 initiatives in place to manage ongoing medical cost trend, though details were sparse.
“Absolute healthcare costs are still much higher than any of us would like to see them,” Mr. Nelson said. “We see some pockets of favorability, particularly in Medicare. But it’s a high trend environment, so we remain cautious, prudent in kind of how we’re thinking about things because we need to finish the job of getting our business back to target margins.”
3. Aetna’s top priority in Medicare Advantage is returning the business to target margins through 2027, a parallel strategy to the wider industry. Mr. Nelson said the company has taken a “disciplined approach” to its MA bids over the past two cycles and that its star ratings remain a competitive strength, with more than 81% of its MA members enrolled in plans rated four stars or higher for 2026. Membership growth will become a bigger priority for the insurer once margins are fully recovered, following exits from unprofitable markets last year and the reduction of broker commissions.
4. Mr. Nelson said reducing friction with providers is a core part of Aetna’s strategy, sharing that more than 90% of prior authorization requests are now approved within 24 hours, and about 83% are approved in real time.
“They are tired of the finger-pointing as well,” he said. “The idea to get on the same page with them, reduce friction, create more streamlined processes, whether it’s prior authorization or just how we help people navigate the system, we want to do that together.”
5. AI is playing a growing role across Aetna’s operations, with agentic AI now able to schedule appointments on behalf of members. A concierge tool called “Aetna One Advocate” uses AI to cut preparation time for member conversations from 90 minutes to two minutes.
Over the last year, Aetna has announced investments in AI-powered navigation tools, new digital features like Care Paths, and the expansion of a care coordination program that aims to reduce hospital readmissions for its MA members. CVS unveiled a broader AI-native consumer platform in late 2025 and said it has generated more than $1 billion in productivity savings through technology investments.
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