Cigna Sells Medicare Business to HCSC for $3.7 Billion Deal

02 Feb, 2024

Cigna Sells Medicare Business to HCSC for $3.7 Billion Deal

Health Care Service Corporation has unveiled its acquisition of Cigna's Medicare business, marking a significant development in the healthcare industry. This $3.7 billion transaction signifies the transfer of control over Cigna's Medicare Advantage, Supplemental Benefits, Part D customers, and the CareAllies business, which collaborates with healthcare providers. Notably, Cigna's Medicare plans currently serve over 3.6 million individuals, with a substantial portion enrolled in Medicare Part D plans.

As part of the agreement, Health Care Service Corporation, known as the largest customer-owned health insurer in the nation, has arranged for Cigna's Evernorth Health Services unit to administer pharmacy benefits for the next four years. Maurice Smith, the CEO of Health Care Service Corporation, expressed optimism about the acquisition, emphasizing the expanded product offerings, robust clinical programs, and broader geographic reach it will bring to members.

Executives at Cigna, headquartered in Bloomfield, Connecticut, characterized the sale as a strategic move aimed at enhancing shareholder value and improving customer service. David Cordani, Chairman and CEO of Cigna, highlighted the need for sustained investment and dedicated resources in the Medicare segment, underscoring the rationale behind the divestiture.

This acquisition comes following Cigna's reported attempt to merge with Humana, as detailed by The Wall Street Journal in November. The transaction with Health Care Service Corporation is slated to be finalized in the first quarter of 2025, with Cigna shares experiencing a modest increase of 0.67% following the announcement.