Cigna faces larger-than-expected risk adjustment payments in the individual market

Cigna is expecting smaller margins in its individual insurance business because of higher-than-expected risk adjustment payments, Cigna Group executives told investors on an Aug. 3 call. 

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The risk adjustment had an unfavorable impact of $80 million in the first half of 2023, and the insurer expects similar costs in the second half of the year, CFO Brian Evanko said. The company has updated its pricing for 2024 based on the payments, with “sizeable price increases” in its two largest states. 

The company is expecting to add some individual marketplace members from Medicaid redeterminations, Mr. Evanko said. 

Cigna CEO David Cordani said medical costs in the individual market were in-line with expectations. 

“In our individual exchange business, we will continue taking a focused approach by engaging customers to improve health outcomes and managing risks in the expanding population we serve,” he said. 

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