HCSC signed a definitive agreement with The Cigna Group to acquire its Medicare Advantage, Medicare Supplemental Benefits, Medicare Part D and CareAllies businesses. This acquisition will benefit HCSC’s current and future members by enhancing the company’s capabilities and reach, particularly in the growing Medicare segment.
Cigna’s Medicare plans currently serve 3.6 million Medicare members, with nearly 600,000 in Medicare Advantage plans, and more than 450,000 on Medicare Supplement plans and 2.5 million with Medicare Part D. CareAllies – which serves about 450,000 patients – is focused on driving the transition to physician value-based care by working with providers to form independent physician associations and accountable care organizations, as well as providing management services to support value-based care arrangements.
Health Care Service Corporation is largest customer-owned health insurer in the country, serving over 22 million people across the United States through health plans in Illinois, Montana, New Mexico, Oklahoma and Texas. And HCSC offers coverage options for employers large and small, individuals and families, and Medicare and Medicaid plans. HCSC also offers related health care products and services such as pharmacy solutions, life and dental insurance, and health technology through a network of affiliates and subsidiaries.
HCSC agreed to a purchase price of $3.3 billion. And the completion of the acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close early in 2025.
Barclays and J.P. Morgan Securities LLC are acting as financial advisors to HCSC and Cravath, Swaine & Moore LLP is serving as corporate legal counsel. And Foley & Lardner LLP, O’Melveny & Myers LLP, and Reed Smith LLP are serving as regulatory counsels.
KEY QUOTES:
“At HCSC, we have a long history of making it possible for people to achieve their best health, and we continue to drive innovations and improvements in health care. The acquisition will bring many opportunities to HCSC and its members – including a wider range of product offerings, robust clinical programs and a larger geographic reach. It builds on our commitment to expand access to quality, affordable care for people in all phases of their lives. We look forward to welcoming new members who will benefit from our proven community-first member and provider engagement model that values local relationships. We lead and operate with a deep sense of care and commitment that informs how we serve our members, engage in our communities and deliver differentiated value.”
– Maurice Smith, HCSC’s CEO, President and Vice Chair
“This acquisition accelerates our growth in an important market segment. The way we do business is as important to us as what we do. We have a culture of compassion and focus on data-driven insights to help members achieve healthier outcomes. We are excited to have Cigna’s Medicare and CareAllies teams bring their proven talent and expertise to HCSC.”
– Opella Ernest, MD, President of HCSC Markets
“The agreement will enable Cigna to drive meaningful value for all our stakeholders, providing an enhanced ability to accelerate investment and growth in our services platform, while further deepening our commitment to our existing health benefits platform. In tandem, the transaction will position our Medicare businesses and CareAllies for additional growth as they continue to serve the needs of their customers as part of HCSC.”
– David M. Cordani, Chairman and Chief Executive Officer of The Cigna Group
