The sale of Cigna's Medicare Advantage business would remove one hurdle in the company's reported goal to merge with Humana, and Health Care Service Corp. might be part of that equation, Bloomberg reported Nov. 29.
Cigna and Humana reportedly are discussing a stock-and-cash deal that could be finalized by the end of 2023. The potential deal is likely to face antitrust scrutiny that has sunk other health insurance megamergers in the past, according to the report. In 2017, a proposed merger between Cigna and Elevance Health, formerly Anthem, was struck down in court. A proposed merger between Humana and Aetna also was struck down the same year.
In early November, news broke that Cigna was exploring the potential sale of its Medicare Advantage business. Bloomberg said the move made "little sense on its own" before the news of the Cigna-Humana deal surfaced, as Cigna previously told investors MA would be an important source of its growth.
Health Care Service Corp. is among the potential buyers of the Medicare Advantage business, according to people familiar with the matter who asked Bloomberg not to be identified because it is not public. HCSC and Cigna representatives declined comment to the news outlet. Chicago-based HCSC is the parent company of BCBS Illinois, Texas, New Mexico, Montana and Oklahoma.
Selling the Medicare Advantage would not clear all hurdles, however, according to the report. Cigna's Express Scripts is the second-largest pharmacy benefit manager and Humana's is the fourth. The companies already participate in a joint drug purchasing entity called Ascent Services. These types of organizations and the PBMs that form them have come under increased scrutiny from federal regulators.