Health Care Service to buy Cigna Medicare business in $3.7 billion sale

The Cigna Corp. logo is displayed at the headquarters of the health insurer on Nov. 26, 2018. The Cigna Group will sell its Medicare Advantage business to another insurer, Health Care Service Corp., for about $3.7 billion. Cigna said Wednesday. The deal also includes a supplemental benefits business and Medicare prescription drug coverage.

Health Care Service Corporation announced Wednesday that it will buy Cigna’s Medicare business.

The $3.7 billion sale will see Health Care Service, the country’s largest customer-owned health insurer, take control of Cigna’s Medicare Advantage, Supplemental Benefits and Part D customers, as well as the CareAllies business that works with healthcare providers.

Cigna’s Medicare plans cover over 3.6 million people, with 2.5 million of those on Medicare Part D plans, according to a Health Care Service news release.

As part of the deal, Chicago-based Health Care Service agreed to have Cigna’s Evernorth Health Services unit provide pharmacy benefits for four years.

“The acquisition will bring many opportunities to (Health Care Service) and its members − including a wider range of product offerings, robust clinical programs and a larger geographic reach,” company CEO Maurice Smith said in a statement.

Medicare customers need ‘dedicated resources’

Executives with Cigna − based in Bloomfield, Connecticut − framed the sale as a way to provide value to shareholders and better service to customers.

“While we continue to believe the overall Medicare space is an attractive segment of the healthcare market, our Medicare businesses require sustained investment, focus, and dedicated resources disproportionate to their size within The Cigna Group’s portfolio,” David Cordani, Cigna chairman and CEO, said in a statement.

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