Once the transaction is complete in the first quarter of 2025, Evernorth Health Services will continue to provide pharmacy benefit services to the Medicare businesses.
The Cigna Group has agreed to sell its Medicare Advantage, Cigna Supplemental Benefits and Medicare Part D business, as well as CareAllies, its valued-based care company, to Health Care Service Corporation (HCSC) for about $3.7 billion. As part of the agreement, Evernorth Health Services, a subsidiary of The Cigna Group, will continue to provide pharmacy benefit services to the Medicare businesses. The transaction is expected to close in the first quarter of 2025.
“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,” David M. Cordani, chairman and CEO of The Cigna Group, said in a press release.
Cigna plans to use most of the proceeds to repurchase company shares.
Maurice Smith, HCSC’s CEO, president and vice chair said in a press release the acquisition supplements their growth strategy in the Medicare marketplace.
Cigna is expected to release its fourth quarter 2023 earnings on Friday, Feb. 2, 2024, and host an investor day in New York City on March 7, 2024.