Health Care Service Corp. has cut its Medicare Advantage footprint in half less than two years after buying Cigna’s Medicare business for $3.3 billion, but the Chicago-based insurer says the narrowed focus will allow it to achieve sustainable growth over time.
The company is coming off a costly year, posting a net loss of more than $1.9 billion in 2025, after net income of $659 million the year prior. HCSC attributed the loss to elevated utilization and higher acuity across all of its lines of business.
“We’re actually at or ahead of most of the targets we set before the deal closed, from an integration and financial performance perspective,” Stephen Harris, president of government markets at HCSC, told Becker’s. “We feel really good about where we are and the momentum we have going into 2027.”
The company, parent of five Blue Cross Blue Shield affiliates, will offer MA plans in 478 counties across 24 states in 2027, down from 948 counties in 30 states and Washington, D.C., this year. The pullback affects about 127,000 of the company’s roughly 800,000 current MA members, with just over half of those members able to choose another HCSC plan in their county next year.
The cuts come a year after HCSC, fresh off its acquisition of Cigna’s Medicare assets in early 2025, said it was taking a long-term view of the market and its ability to take advantage of the country’s aging population trends in the years to come. Mr. Harris said that view hasn’t changed.
“We looked strategically across all of our geographies to determine where we will be best positioned for long-term success,” he said. “That took into account the strength of our provider partnerships across those geographies, network adequacy, how many members we had in certain micro markets, what members needed from a product delivery perspective, and utilization. Then we looked at where we were from a medical cost trend perspective relative to reimbursement from CMS.”
The result is a portfolio built around HMOs, particularly the HealthSpring plans HCSC acquired from Cigna. The company is dropping Blue-branded MA plans in Texas and Oklahoma, exiting Montana’s MA market entirely and narrowing its Illinois service area.
New Mexico is the notable exception. HCSC, which also holds a Medicaid contract in the state, is expanding its Blue-branded MA plan to all 33 counties ahead of New Mexico’s planned 2028 move to fully integrated dual-eligible special needs plans. Beyond MA, HCSC will sell HealthSpring Medicare supplement plans in 48 states and standalone drug plans in all 50.
And while the company’s MA reduction is the largest of any major insurer for 2027, UnitedHealthcare, Centene, Aetna and Humana are also trimming their portfolios amid continued financial pressures within the segment.
“I’m optimistic that we’ll begin to see a period of stabilization, and that it will begin to take hold as we look out to 2028 and beyond,” Mr. Harris said. “The last couple of years have been unique, with a lot of policy changes, medical cost trend and other forces that have led to some of the changes we see across the industry.”
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