The Cigna Group and Humana are "in talks" to merge, The Wall Street Journal reported Nov. 29.
According to the report, the two organizations are discussing a stock-and-cash deal that could be finalized by the end of 2023.
A merger between Cigna and Humana would create one of the largest healthcare companies in the U.S. and become a rival to other health services giants such as UnitedHealth Group, Elevance Health and CVS. On Nov. 29, Cigna's market value was about $83 billion and Humana's was about $62 billion.
The WSJ report comes after Reuters reported Nov. 6 that Cigna is exploring a potential sale of its Medicare Advantage business.
According to Cigna's third-quarter earnings report, the company had 599,000 Medicare Advantage members as of Sept. 30, a small portion of Cigna's 19 million total insurance members. Humana is the second largest Medicare Advantage carrier in the country with 5.9 million members as of Sept. 30. UnitedHealthcare is the largest at 8.1 million.
Cigna's total revenue in the third quarter was $49 billion. The company projects year-end revenue of at least $192 billion. In the third quarter, net income was $1.4 billion. Evernorth revenue rose 8.1% in the third quarter to $38.6 billion. The insurance side of the business, Cigna Healthcare, reported third-quarter revenue of $12.8 billion.
Humana's total revenue in the third quarter was $26.4 billion, up 16% year over year. The company reported $832 million in net income and raised its 2023 individual Medicare Advantage membership growth expectations by 35,000, predicting to add around 860,000 members in 2023, or 19 percent more than in 2022.
The possible merger comes as antitrust regulators in Washington, D.C. have recently expressed concerns with healthcare consolidation among hospitals and payers. Andrew Forman, deputy assistant attorney general for the Justice Department's antitrust division, said at an October conference that the department is ramping up its post-merger investigations and will look into attempts to illegally monopolize healthcare markets.
Cigna and Humana discussed a potential merger in 2015, according to the WSJ. In 2017, a proposed merger between Cigna and Elevance Health, formerly Anthem, was struck down in the courts. A proposed merger between Humana and Aetna was also struck down the same year. Aetna was then purchased by CVS Health in 2018.