Health insurance companies that for years have largely grown their Medicare Advantage business organically as Americans flocked to sign up for such coverage will have opportunities to grow by acquisition in 2024.

With Cigna deciding against an acquisition of Humana to build a combined diversified health insurance conglomerate in favor of “bolt-on acquisitions,” there’s been some speculation Cigna could divest its Medicare Advantage business.

Cigna’s Medicare Advantage business is much smaller than its rivals that include UnitedHealth Group and CVS Health’s Aetna health insurance unit. Humana’s Medicare Advantage business is almost 10 times the size of Cigna’s, which has more than 590,00 seniors enrolled.

When Cigna announced it would significantly increase its share repurchase program and pursue “bolt on” acquisitions rather than the Humana deal, Cigna chief executive David Cordani hinted at divestitures though not Medicare Advantage specifically.

“As we look at the broader landscape and the strategic opportunities before us, we will remain financially disciplined with a clear focus on executing against our strategy, delivering value for our shareholders, and investing in our future,” Cordani said. “In light of the current environment, we will consider bolt-on acquisitions aligned with our strategy, as well as value-enhancing divestitures.”

Possible suitors mentioned for Cigna’s Medicare Advantage business have included Elevance Health, which operates Blue Cross and Blue Shield plans in 14 states, including markets where Cigna has Medicare Advantage enrollees. In addition, Health Care Service Corp., which also owns Blue Cross plans and sells Medicare Advantage coverage where Cigna has health insurance for seniors.

Some analysts think growth of Medicare Advantage could be maturing at the same time the federal government is looking at ways to control spending on what it pays private health insurers to administer Medicare Advantage.

With more than half of the nation’s eligible seniors enrolled in Medicare Advantage plans, competition continues to intensify with insurers having bolstered their benefit offerings and expanded their medical care provider networks in new regions so they can compete.

But expanding provider networks to new markets brings added expenses that could also force some smaller health plans, regional insurers and startups to consider mergers or sales to larger plans.

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