Cigna's Strategic Shift: Selling Medicare Business for $3.3 Billion

Key Points

• Health Care Service Corp to acquire Cigna's Medicare business for $3.3 billion.
• The deal includes Medicare Advantage, Medicare supplement, and Medicare drug plans.
• Cigna's strategic shift follows its $3.8-billion acquisition of HealthSpring in 2011.

In a significant move within the insurance sector, Health Care Service Corp announced its acquisition of Cigna's Medicare business for a substantial $3.3 billion in cash.

The transaction encompasses various facets of Cigna's Medicare portfolio, spanning Medicare Advantage, Medicare supplement, and Medicare drug plans. Additionally, the deal incorporates CareAllies, a unit collaborating with physician groups and healthcare providers.

This divestiture marks a strategic pivot for Cigna, altering its approach to the sector after its notable $3.8-billion acquisition of HealthSpring in 2011.

Health Care Service Corp, known for its Blue Cross Blue Shield insurance plans in five U.S. states, will solidify its position with this acquisition. The company, boasting a workforce of over 27,000 and serving 18.6 million members, emphasizes its commitment to expanding its influence in the healthcare landscape.

Notably, the vast majority of Cigna's revenue is derived from its commercial business and pharmacy benefits division. The acquisition of Express Scripts for $52 billion in 2018 played a pivotal role in bolstering Cigna's presence in these segments.

Cigna's Medicare Advantage business, constituting 4.4% of the company's $179.4 billion revenue from external customers in 2022, serves 3.6 million Medicare members. The sale aligns with Cigna's strategic focus and is expected to close in early 2025, according to Health Care Service Corp.

For more information on related topics, consider exploring:

• APRNEWS/STOCKS