CVS Health Dives To 3-Year Low On Medicare Cost Surge

CVS Health reported significantly lower-than-expected earnings for the first quarter, with a sharp decline in adjusted EPS and a slight miss in revenue growth. The company cited increased costs in its Medicare business as a major factor. Following these results, CVS also reduced its full-year earnings and cash flow forecasts, anticipating ongoing cost pressures.

The poor financial performance led to a substantial drop in CVS stock, which fell to its lowest level in three years. The outlook also negatively impacted other companies in the managed care sector, such as UnitedHealth Group and Humana, though to a lesser extent.