The Cigna Group has completed the sale of its Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D, and CareAllies businesses to Health Care Service Corporation (HCSC) for $3.3 billion. The transaction streamlines The Cigna Group’s portfolio and enhances its ability to support customers more effectively. Proceeds from the sale will be used for share repurchases, in line with The Cigna Group’s capital deployment priorities.
David M. Cordani, Chairman and CEO of The Cigna Group, expressed confidence that HCSC will continue the meaningful work for these customers. The Cigna Group will still provide pharmacy benefit services and other solutions to the Medicare businesses through its health services company Evernorth Health Services, as part of an agreement with HCSC for a defined period post-closing.
Maurice Smith, HCSC’s CEO, President, and Vice Chair, stated that the transaction aligns with their mission of expanding access to quality health care by adding capabilities and deepening their geographic presence across the United States. The transaction is not expected to disrupt coverage or service for customers, clients, providers, or brokers. Medicare customers with questions about their coverage can contact the number on their member ID card.
The Cigna Group is a global health company committed to creating a better future built on the vitality of every individual and community.
Cigna and HCSC finalize Medicare transaction
The company maintains sales capabilities in over 30 markets and jurisdictions and has approximately 182 million customer relationships worldwide.
HCSC’s acquisition comes amid increasing market pressures, including rising medical costs. The deal will enable HCSC to serve 26.5 million people, including 4.3 million Medicare members. Cigna reported $247 billion in revenue for 2024, an increase of nearly 27% year-over-year.
Despite selling its Medicare business, Cigna’s Evernorth Health Services division will continue to serve the now-sold Medicare business for the next four years. The sale reflects ongoing adjustments in the healthcare industry as companies navigate rising costs and shifting market demands. Cigna executives have indicated that the divestiture is part of a strategy to create a leaner and more focused organization.
The acquisition is substantial for Chicago-based HCSC, a Blue Cross Blue Shield licensee that provides coverage in Illinois, Montana, New Mexico, Oklahoma, and Texas. Adding Cigna’s assets quadruples HCSC’s Medicare Advantage membership and extends its reach to plans in 25 additional states and Washington, D.C.
By completing this sale, Cigna aims to streamline its operations and concentrate on more profitable segments of its business, potentially enhancing its overall financial health and market position. The deal represents a reorientation towards core strengths for Cigna and a major growth step for HCSC in the competitive landscape of Medicare services.
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