More than a year after the original deal announcement, The Cigna Group announced on March 19 the successful completion of the sale of its Medicare assets to Health Care Service Corporation (HCSC). The assets include Cigna’s Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D and CareAllies businesses. The divestment of these assets streamlines Cigna’s portfolio and enables it to drive further innovation to support customers.
HCSC is the United States’ largest customer-owned health insurer with nearly 17.5 million members in its health plans in Illinois, Montana, New Mexico, Oklahoma and Texas. HCSC was formerly known as Hospital Service Corporation and changed its name to Health Care Service Corporation in 1975.
As announced in the original January 2024 announcement, proceeds from the sale will be used in alignment with The Cigna Group’s capital deployment priorities, with the majority expected to be allocated to share repurchases. Although the final purchase price was not mentioned in the closing announcement, the original deal announcement from 2024 disclosed a total transaction value of approximately $3.7 billion.
The Cigna Group will continue to provide pharmacy benefit services and other solutions to the Medicare businesses through its health services company Evernorth Health Services as part of services agreements with HCSC for an agreed period post-closing. The transaction is not expected to disrupt coverage or service for customers, clients, providers or brokers of the Medicare or CareAllies businesses. Coverage continues and remains unchanged to ensure that patient care continues seamlessly, with no disruption.
Centerview Partners LLC is acting as financial advisor to Cigna. Morgan Stanley & Co. LLC provided additional financial advice. Wachtell, Lipton, Rosen & Katz is serving as corporate legal counsel, and Rule Garza Howley LLP, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and Sidley Austin LLP are serving as regulatory counsels.
As of March 19, there have been five Managed Care deals announced so far in 2025, just slightly slower than the seven announced during the same 2024 period (January 1, 2024, to March 19, 2024), yet on par with the five deals announced during the same 2023 period. (January 1, 2023, to March 19, 2023). There were 27 Managed Care transactions announced during all of 2024, and 31 announced during 2023.
