Insurer Cigna closes $3.8B HealthSpring purchase

BLOOMFIELD, Conn. -- Cigna completed its $3.8-billion acquisition of fellow insurer HealthSpring Inc., giving it a bigger stake in the fast-growing Medicare Advantage market.

Cigna, based in Bloomfield, Conn., said in October that it would buy HealthSpring to strengthen its Advantage customer base that, at the time, had only had about 45,000 members. HealthSpring, based in Nashville, Tenn., has about 340,000 Advantage members and another 800,000 Medicare prescription drug plan members.

Medicare Advantage plans are privately run versions of the government's Medicare insurance program for the elderly and disabled. Insurers are looking to grab bigger slices of this market, which is expected to grow as baby boomers become eligible for the plans.

Earlier this month, HealthSpring said its shareholders had approved the deal, which also has received antitrust clearance.

Cigna reports on its fourth-quarter performance Thursday, and the company said it also will provide a 2012 earnings forecast that includes anticipated contributions from HealthSpring.

Shares of Cigna Corp. climbed 32 cents to $44.82 in afternoon trading while the Standard & Poor's 500 index fell slightly.