Cigna adds to insurers' ACA concerns, reports $39.7B in 2016
- Cigna’s 2016 revenues totaled $39.7 billion, up 5% from the previous year, reflecting strong performance in its commercial employer and global supplemental benefits businesses, the company announced Thursday.
- However, CEO David Cordani said the ACA's individual market is "fragile at best," adding to the claims the Aetna and Anthem CEOs had this week about the federal healthcare law not working as intended.
- Cigna's fourth quarter adjusted income from operations was $485 million, or $2.87 per share – about even with the Q4 2015.
Cigna's earnings report comes as a federal judge prepares to rule on Anthem’s $54 billion bid to acquire it. Last week, a judge ruled to block the proposed $37 billion merger of Aetna and Humana, citing the deal's detrimental effect on competition in the insurer market. Meanwhile, Cigna said it has made no decision regarding Anthem’s notice seeking an extension of the merger completion date, Reuters reports.
If the Anthem-Cigna deal fails to go through, Cigna would still have up to $14 billion to spend on other mergers and acquisitions, Forbes reports. “We have excellent flexibility,” Cordani said during a fourth-quarter earnings call. “All alternatives are available to us.”
The government’s case against a Cigna-Anthem merger involves markets for large employer insurance, or the national account market — i.e., employers with more than 5,000 employees and operations in more than one state. Currently, four payers serve this market: Cigna, Aetna, UnitedHealthcare and the Blue Cross Blue Shield network, of which Anthem is the largest player.
Aetna CEO Mark Bertolini told investors on Tuesday that the company won’t sell in ACA exchanges where it pulled out last August and is still weighing whether to continue in the four states where it remains. A day later, Anthem CEO Joseph Swedish expressed disappointment how the individual market has performed and said future participation will depend on changes lawmakers make to the healthcare law.
- Cigna Cigna Reports 2016 Results, Expects Attractive Earnings Growth in 2017
- Reuters Cigna adds to insurers’ pressure on lawmakers for Obamacare fixes
- Business Insider Cigna’s profit sees a boost from strength in its commercial business
- Reuters BRIEF-Cigna says has made no determination about Anthem merger extension
- Forbes If Anthem Deal Fails, Cigna Has Up To $14B To Spend