Cigna Finalizes $3.3 Billion Sale of Medicare Business to HCSC

Cigna Group has officially completed the sale of its Medicare business to Health Care Service Corporation (HCSC) for $3.3 billion, marking a significant shift in the healthcare landscape. The transaction, which closed on March 19, 2025, includes Cigna's Medicare Advantage, Part D, supplemental benefits, and CareAllies units.

Deal Structure and Impact

The deal, initially valued at $3.7 billion, has been finalized at $3.3 billion. Under the terms of the agreement, HCSC will acquire Cigna's Medicare-related operations, expanding its footprint in the senior healthcare market. Cigna, while divesting direct control of these Medicare units, will continue to provide pharmacy benefit management and other services through its Evernorth division as part of an ongoing partnership with HCSC.

David Cordani, CEO of Cigna Group, expressed confidence in the transaction, stating, "We are proud of the positive impact we have made in people's lives and the unique value provided through our Medicare businesses and are confident that HCSC will continue the meaningful work that we have done for these customers."

Strategic Implications and Capital Allocation

Cigna plans to strategically deploy the capital generated from the sale across multiple priorities. However, the company has indicated that a majority of the proceeds are likely to be directed towards stock repurchases, potentially signaling confidence in its core business and a focus on shareholder value.

For HCSC, the acquisition aligns with its mission to expand access to quality healthcare. Maurice Smith, CEO of HCSC, emphasized the strategic importance of the deal: "This transaction is fully aligned with our mission of expanding access to quality health care by adding capabilities and deepening our geographic presence across the United States. We recognize that the health and wellness needs for older Americans are growing, and we plan to have an important role in helping seniors live healthier, fuller lives."

Continuity of Care and Integration

Both Cigna and HCSC have assured stakeholders that the transition will not disrupt coverage for existing members, providers, or brokers. This commitment to continuity is crucial for maintaining trust and stability in the Medicare market.

Smith further commented on the integration process, stating, "We are excited to welcome our new Medicare members and the employees who will continue to help them achieve their best health." This statement suggests a focus on smooth integration and retention of key personnel to ensure consistent service quality.