Cigna, Humana rumored to be in merger talks

Two major players in the managed-care space are reported to be in talks to merge in a cash-and-stock deal that could be finalized before year-end, The Wall Street Journal reported.

Cigna and Humana are rumored to be in talks to merge after reports earlier this month that Cigna was exploring a sale of its Medicare Advantage business. Cigna’s market value stands at about $83 billion while Humana’s is about $62 million, the Journal said, making this potential merger a possible mega deal.

Humana is the No. 2 provider in the Medicare Advantage space, with 18% of the market – about 5.5 million enrollees, KFF reports. Meanwhile, Cigna holds about 2% of the Medicare Advantage market, with 600,000 enrollees.

But a merger would combine the two companies’ individual strengths into a health insurance powerhouse.

Both companies have significant capabilities in the health care services space. Humana owns CenterWell, which includes home health care, primary care and pharmacy services. Cigna owns Evernorth Health Services, which offers pharmacy services as well as behavioral health services.

Cigna also owns Express Scripts, the second-largest pharmacy benefit manager in the nation, while Humana owns the fourth-largest PBM.

Although Humana has a large piece of the Medicare Advantage pie, the company isn’t strong and commercial and employer coverage, while Cigna has a strong presence in those areas. Meanwhile, Cigna has found success selling individual coverage in the Affordable Care Act marketplace.

Forbes reported that in the second quarter of 2023, Cigna more than doubled the number of customers buying individual coverage under the ACA - 820,000 compared to 337,000 at the end of 2022. The company also reported a 12% growth in the number of seniors buying its Medicare Advantage plans to 592,000 compared to 529,000 at the end of 2022.

A Humana spokesman told InsuranceNewsNet the company would have no comment on the report of the possible merger, while Cigna did not respond to a request for comment.

Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.