Cigna is selling its Medicare plans, but Evernorth, its health services arm, is still in the business.
On a Feb. 2 call with investors, Cigna Group CEO David Cordani said Medicare is still an attractive business, but Cigna's Medicare offerings were taking up a disproportionate share of the company's resources relative to its size.
Cigna announced a deal to sell its Medicare Advantage, Medicare Supplement and Part D plans to Health Care Service Corp. for $3.3 billion on Jan. 31. As part of the deal, Evernorth will continue providing health services to customers being transferred to HCSC.
"We are really pleased with the nature of the transaction we're able to structure with HCSC. We see it as a win-win," Mr. Cordani said, according to a transcript of the call published by The Motley Fool. "And it's a clarification to our strategy within our portfolio."
The Medicare market is still an expansion opportunity for Evernorth, Mr. Cordani said. Medicare Advantage continues to be popular among older adults, who generally report high satisfaction with the program, though the peak of older adults aging into the program has passed, he said.
"We've been quite deliberate now for several years, working to expand the service portfolio and the value proposition within Evernorth for health plan partners as it relates to their government services, be it Medicare, be it duals, be it Medicaid," Mr. Cordani said.
Evernorth prefers to partner with providers, rather than acquire them outright, Evernorth CEO Eric Palmer said in January. Cigna is focused on acquisitions in a few key areas, including home health, behavioral and virtual care, Mr. Cordani said in January.
Cigna recorded double-digit growth in both its insurance business and Evernorth in 2023. Evernorth's revenues rose 12% year over year to $40.5 billion in the fourth quarter, according to its fourth quarter earnings published Feb. 2.
"We've demonstrated a very attractive proven track record of growing our government reach through the services franchise, and we will continue to fuel that on a go-forward basis and see that as an attractive trajectory for us," Mr. Cordani said.