Health Care Service Corporation (HCSC) has successfully finalized its acquisition of Cigna’s Medicare Advantage, Medicare Supplemental Benefits, Medicare Part D, and CareAllies businesses. This significant deal, initially announced over a year ago, was valued at around $3.7 billion.
Maurice Smith, the CEO, President, and Vice Chair of HCSC, expressed his enthusiasm about the acquisition, stating that it will allow the company to broaden its reach across the United States. Smith emphasized the growing health and wellness needs of older Americans and HCSC’s commitment to playing a vital role in helping seniors lead healthier lives. He welcomed the new Medicare members and employees as part of this acquisition.
The Cigna Group will continue to offer pharmacy benefit services and other solutions to Medicare members through Evernorth Health Services under service agreements for an agreed period following the completion of the sale. With the acquisition finalized, HCSC now serves a total of 26.5 million individuals, including 4.3 million Medicare members nationwide.
HCSC reassured customers, clients, providers, and brokers of the Medicare and CareAllies businesses that the transition will not disrupt service, and coverage will remain unchanged. Medicare members were advised to contact the number on their member ID card for any inquiries about their coverage.
The transaction is expected to enhance the Cigna Group’s adjusted earnings per share by 2025. Proceeds from the sale will be strategically utilized in line with the company’s capital deployment priorities, with a significant portion allocated to share repurchases.
The decision to sell its Medicare Advantage business was part of Cigna’s strategy following the termination of the proposed merger with Humana in December 2023. The merger would have resulted in a company with a combined value exceeding $140 billion based on market values.
David Cordani, the chairman and CEO of The Cigna Group, expressed confidence in HCSC’s ability to continue the valuable work done for Medicare customers. He reaffirmed the company’s commitment to serving Medicare populations through the range of products and services offered by Evernorth Health Services.
In conclusion, the completion of the acquisition marks a significant milestone for both HCSC and Cigna, paving the way for enhanced healthcare services and support for Medicare beneficiaries across the country. The seamless integration of these businesses under HCSC’s umbrella is expected to bring about positive outcomes for all stakeholders involved.
