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Cigna Sells Medicare Business to HCSC for $3.7B: What It Means

Analysis  |  By Marie DeFreitas  
   February 01, 2024

What the $3.7 billion dollar deal means for each company. 

The deal is just about sealed. Cigna is ditching its Medicare business in a sale to Health Care Service Corporation (HCSC) for around $3.7B, set to close in early 2025.

HCSC will acquire Cigna’s Medicare Advantage, Part D, Supplemental Benefits, and CareAllies businesses, which in total currently provide about $7.9B in revenue for the giant. Cigna’s Medicare business currently serves 3.6 million members, with close to 600,000 members in MA plans, over 450,000 on Medicare Supplement plans, and 2.5 million with Medicare Part D. Its CareAllies business serves approximately 450,000 patients. As part of the deal, Cigna’s Evernorth Health Services subsidiary entered into a four-year agreement with customer-owned health insurer HCSC to continue to provide pharmacy services to Medicare plans if the deal officially closes.

Did We Expect This?

There were rumors of Cigna mulling the sale back in November, and we even saw Elevance enter into somewhat of a bidding war with HCSC for Cigna’s Medicare businesses in December. We all knew this acquisition was in the cards, but did we expect HCSC to prevail over Elevance? Looking just at size and revenue, Elevance is raking in over triple that of HCSC, $170B (2023) vs $54B (2022), and it seemed Elevance would take the pot. HCSC is also not publicly traded like Elevance, limiting it to a cash-only offer. Perhaps a quick cash offer is what Cigna was looking for in this deal; the sale comes at a time when government scrutiny of Medicare is high. Cigna pushed through with this sale despite their failed merger with Humana in December.

What It Means For HCSC

This acquisition marks a big transformational step in HCSC’s growth, taking it from a regional to a national insurer. With license to provide BCBS plans in five states, HCSC employs over 27,000 people and serves 18.6 million members.

In a press release HCSC CEO Maurice Smith said that this sale will allow the insurer not only to quickly scale, but also evolve its product portfolio.

"This acquisition supplements our growth strategy in the large and growing Medicare marketplace and will bring many opportunities to HCSC and its members—including a wider range of product offerings, robust clinical programs, and a larger geographic reach," Smith said.

What It Means For Cigna

Cigna seems to be making particularly strategic moves with this sale. The insurer acquired its Medicare sector in a $3.8B acquisition of HealthSpring back in 2011. But the majority of Cigna’s revenue doesn’t stem from their Medicare business, but rather their commercial and pharmacy benefits divisions where it spent $52B in a purchase of Express Scripts in 2018.

CEO David Cordani of The Cigna Group said that this HCSC sale will allow the company to focus on growth targets.

"This decision is aligned with our highly disciplined approach to managing our portfolio and allocating resources toward growth opportunities in our Evernorth Health Services and Cigna Healthcare portfolios," Cordani said in the press release. "While we continue to believe the overall Medicare space is an attractive segment of the healthcare market, our Medicare businesses require sustained investment, focus, and dedicated resources disproportionate to their size within The Cigna Group's portfolio."

While this is a big move for HCSC’s expansion and portfolio evolution, will the company be able to retain all of Cigna’s Medicare members? Going forward in the current Medicare landscape is uncertain, and the “Medicare Gold Rush” we saw at the start of last year has teetered off. HCSC serves more than 22 million members across the country and will be adding 3.6 million more if the sizable deal goes through.

Marie DeFreitas is an associate content specialist at HealthLeaders.


  • Cigna has agreed to sell off its Medicare Advantage business to Health Care Service Corporation for about $3.7B.
  • The sale marks a big expansion move for customer-owned insurer HCSC.
  • Cigna is making strategic moves in the industry as the government tightens their leash on the Medicare market.

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