News Briefs: Cigna May Be Close to Selling MA Business to Health Care Service Corp.

The Cigna Group may sell its Medicare Advantage business to Health Care Service Corp. for between $3 billion and $4 billion, according to the Wall Street Journal. After Cigna and Humana Inc. reportedly abandoned their rumored talks of combining, Bloomberg last month reported that HCSC and Elevance Health, Inc. were competing to buy Cigna’s MA segment. Sources close to the matter said Cigna is in “exclusive talks” with HCSC, which operates Blue Cross and Blue Shield plans in five states, the Wall Street Journal reported on Jan. 3.

After securing an amended credit agreement with JP Morgan, Bright Health Group, Inc. on Jan 1. finalized the previously announced sale of its Medicare Advantage assets to Molina Healthcare, Inc. The technology-driven startup on Dec. 29 said an amendment to its credit facility with JP Morgan would reduce the final repayment amount by roughly $30 million to approximately $298 million. With the close of the MA sale — which involves the California plans Brand New Day and Central Health Plan — the company has eliminated its secured debt and will use the remaining proceeds of the sale to “provide a solid foundation” for advancing its NeueHealth accountable care organization business, according to a Jan. 2 press release. Molina in December said it would buy the MA plans for approximately $425 million, down from the originally announced $510 million; analysts speculated the discount had to do with underperformance in Bright’s MA business due to heightened Medicare utilization trends in 2023.The deal nets Molina 121,863 MA members, boosting its membership by 115%, according to AIS’s Directory of Health Plans.

© 2024 MMIT
Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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