The Cigna Group is shifting its focus toward health services and core commercial offerings following the completion of its sale of Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D, and CareAllies businesses to Health Care Service Corporation (HCSC).
By divesting these operations, Cigna aims to streamline its portfolio while maintaining a role in the Medicare space through its health services division, Evernorth Health Services.
The sale comes as Cigna navigates financial pressures, including higher-than-expected medical costs that contributed to lower fourth-quarter earnings. The company also set an adjusted earnings floor for 2025 at $29.50 per share, below Wall Street’s average forecast of $31.50.
Read more: Cigna misses expectations as costs rise
The transaction is among the key strategic moves that will be overseen by Brian Evanko, who will assume the role of president and chief operating officer on March 31.
The company plans to use most of the proceeds from the sale for share repurchases, aligning with its capital deployment priorities.
Despite selling these assets, Cigna will continue providing pharmacy benefits and health solutions to the divested businesses under service agreements with HCSC for a specified period.
Cigna chairman and CEO David M. Cordani acknowledged the company’s role in the Medicare market and expressed confidence that HCSC will continue serving these customers.
"We remain committed to serving Medicare populations through the portfolio of products and services we offer through Evernorth Health Services," said Cordani.
According to Maurice Smith, the president, CEO, and vice chair of HCSC, the acquisition allows the company to expand access to healthcare services, particularly for the growing Medicare population.
"We recognize that the health and wellness needs for older Americans are growing, and we plan to have an important role in helping seniors live healthier, fuller lives," said Smith.
Both companies confirmed that the transaction would not affect coverage or service for Medicare and CareAllies customers, clients, providers, or brokers.
Members will continue to access their benefits without changes, and those with coverage questions are advised to refer to the contact information on their member ID cards.
How will this shift impact Cigna’s future business direction? Share your thoughts in the comments.
