The Cigna Group confirmed “it is not pursuing a combination with Humana.”
Despite speculation in certain media outlets, including the Wall Street Journal, such a deal really made little sense, especially given Cigna’s move to get out of the Medicare business. Cigna is nearing completion of the $3.3 billion sale of its Medicare business to Health Care Service Corp. by early 2025.
Humana operates one of the nation’s largest Medicare operations, selling an array of products for seniors including Part D drug plans and Medicare Advantage plans that contract with the federal government to provide traditional coverage available in traditional Medicare plus extra benefits and services to seniors, such as disease management and nurse help hotlines with some also offering vision, dental care and wellness programs.
While Humana and other health insurers including CVS Health and UnitedHealth Group are grappling with higher medical expenses from seniors enrolled in Medicare Advantage, Cigna’s smaller Medicare business has helped them avoid some of these problems.
Cigna made its announcement about Humana speculation ahead of meetings with investors and analysts.
“During these meetings, The Cigna Group expects to reaffirm projected full year 2024 consolidated adjusted income from operations of at least $28.40 per share and adjusted EPS growth of at least 10% in 2025,” Cigna said. “Additionally, in light of recent and persistent speculation, The Cigna Group expects to communicate that the company is not pursuing a combination with Humana Inc. The Cigna Group remains committed to its established M&A criteria and would only consider acquisitions that are strategically aligned, financially attractive, and have a high probability to close.”
Humana, which this year has Medicare Advantage and Medicare Advantage Prescription Drug plans in 2,907 counties in 49 states plus Washington, D.C. and Puerto Rico, will reduce its footprint to have Medicare Advantage and drug plans in 2,852 counties in 48 states plus Washington and Puerto Rico.
Meanwhile, terms of Cigna’s deal with Health Care Service Corp. call for the operater of five Blue Cross and Blue Shield plans in give states to acquire Cigna’s Medicare Advantage plans, Cigna supplemental benefits, Medicare Part D drug benefits and CareAllies, a business that helps medical care providers with various administrative services and contracting.
Chicago-based Health Care Service operates Blue Cross and Blue Shield health insurance plans in Illinois, Texas, Oklahoma and New Mexico, with more than 18 million health plan enrollees across the country, and is looking to grow its Medicare Advantage product offerings, which are minimal compared to other large health insurers.
