In addition, Aetna expects to participate in up to 15 private exchanges in 2014. The private exchanges will offer Aetna more freedom than the public exchanges in defining how it participates and the products it offers.
Aetna's acquisition of Coventry Health Care, which was completed during the second quarter, is part of its strategy to enhance its opportunities in the Medicare Advantage and Medicaid markets. While both markets are expected to grow, pricing pressures in Medicare Advantage will slow that growth compared to recent years.
Cigna expects to have about $1 billion in free cash flow to spend on strategic investments, including technology and merger and acquisition opportunities. CEO David Cordani says the insurer is looking at M&As to "further expansion of our senior footprint" as well as in the Medicare/Medicaid dual-eligibles marketplace. It is also looking at opportunities in its individual or retail-based portfolio of capabilities.
The insurer expects to participate in a variety of public and private health insurance exchanges. Private exchanges offer an opportunity to focus products on the retail purchasing experience for individual employees or customers, as well as to encourage the adoption of engagement, incentive-based programs. It plans to roll out in 2014 a proprietary exchange.
Cigna's collaborative accountable care program, an insurer/physician partnership that includes clinical support and data to enable physicians to add value to the care they provide, now has more than one million members. The insurer reports that it is seeing improvements in medical costs and care quality, which exceed the market averages.