New Cigna CEO: Insurer to exit ACA, focus on ‘relentless’ push for affordability

The Cigna Group executives said the health insurer will exit the Affordable Care Act individual exchange business beginning in 2027 as part of a broader effort to reshape its portfolio and focus on higher-growth segments.

The health insurer made the announcement Thursday morning during a call with Wall Street analysts to discuss first-quarter financial results. It marked the debut of incoming CEO Brian Evanko, who will succeed David Cordani on July 1.

Evanko did not shy away from what he called the tough problems within the healthcare system.

“The problems that we see really are threefold,” Evanko said. “The first one is affordability.  The second one is, at times, there are fragmented customer and patient experiences. The third one is we have a reactive sick care system. So, our strategy at the Cigna Group is focused on addressing each of these opportunities.”

Evanko framed the move away from the ACA exchanges as a strategic decision to exit a market where Cigna is unlikely to achieve scale. The insurer said expectations for its exchange business in 2026 remain unchanged.

“This is small business for us today, and it's been shrinking in recent years,” Evanko said. “The decision will allow us to further intensify focus on our core growth platforms across The Cigna Group, notably our rapidly growing specialty and care services businesses, our industry-leading pharmacy benefit services business and our flagship U.S. employer business.”

Cigna reported solid performance across its Evernorth Health Services unit and its Cigna Healthcare segment in the first quarter, citing disciplined execution and contributions from multiple business lines. Based on the results, the company increased its 2026 adjusted earnings per share outlook to at least $30.35.

Executives said second-quarter adjusted earnings are expected to account for about 25% of the full-year total, reflecting typical seasonal patterns. The company continues to project at least $6.9 billion in full-year adjusted income from operations at Evernorth and at least $4.525 billion in pretax adjusted earnings for Cigna Healthcare.

The insurer expects medical care ratios in the second quarter to come in slightly above the high end of its full-year range due to seasonal factors, but maintained its overall annual guidance.

First-quarter operating cash flow totaled $1.1 billion, with the company expecting most cash generation to occur in the second half of the year. Its debt-to-capitalization ratio improved to 42.3% as of March 31, down 70 basis points from year-end 2025, with further improvement anticipated by the end of 2026.

'Relentless drive' promised

During the call, executives highlighted continued momentum in specialty care, driven by increased adoption of biosimilars and specialty generics, as well as contributions from recent investments. They said those products are helping lower costs for patients while supporting margins.

Evanko cited three healthcare goals going forward, including using artificial intelligence to drive more personalized and affordable care, part of a “relentless drive” to find affordable treatments.

Finally, the new CEO promised a shift “further upstream into care journeys through preventive care, diagnostics and encouraging behaviors that promote health and wellness.”

Cigna also pointed to strong retention in its pharmacy benefit services business and early positive feedback from clients on its new “rebate-free” model, which is expected to become the standard offering by 2028. The company said it anticipates at least half of its pharmacy benefit services members will transition to the new model by then.

Executives said they remain confident in the company’s long-term strategy and ability to deliver shareholder value through disciplined capital deployment, including reinvestment, dividends, share repurchases and targeted acquisitions.

Cigna reaffirmed its expectation of sustained but stable elevated health care cost trends, noting no acceleration so far in 2026.

Quarterly Highlights:

• Evernorth Health segment revenue rose 9% to $53.7 billion, fueled by an 11% growth in Pharmacy Benefit Services primarily due to drug mix.
• Committed to a standard electronic prior authorization process for commonly reviewed medical services, aiming to cover over 70% of volume by year-end.
• Total medical customers increased 1% from late 2025 to 18.3 million, with notable growth in international and select markets.

By The Numbers:

• Total Revenues: $68.5 billion ($65.5 billion in Q1 2025)
• Net Income: $1.65 billion ($1.32 billion in Q1 2025)
• Earnings Per Share: $6.26 per share ($4.85 in Q1 2025)
• Share Repurchases: NA
• Dividend Declared: $1.56 per share
• Stock Price Movement: Shares rose slightly Thursday midday to $292.86.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.