Cigna Corp. has inked a deal to offer Humana Inc.'s Medicare Advantage (MA) plans to corporations that offer retiree health benefits effective July 1. The reason for the alliance: Cigna's strength in the commercial market and Humana's strength in the MA market. Philadelphia-based Cigna administers health plans for corporate employers and has a limited foothold in the MA business market (i.e., 16,000 corporate members). Louisville, Ky.-based Humana is a big player in the MA market, deriving more than half of its revenues from MA plans, reports the Wall Street Journal. However, most of Humana's 1.7 million MA members have individual policies. Only 200,000 are group members, says Humana spokesman Tom Noland.
Under the agreement, Cigna will sell the MA plans to corporations that offer retiree health benefits, and Humana will provide the plans. Cigna and Humana will coordinate services and plan an equal split of the proceeds from plan sales. Both insurers will continue to independently offer their existing product lines.
"By bringing together the capabilities of two strong companies, we're offering market-leading solutions and creating differentiated value for our clients in these uncertain times," says Sam Srivastava, Cigna's president of Government Segments. "Through this alliance, we can expand Cigna's portfolio, while Humana is able to expand its distribution to a larger base of employer customers for its Medicare Advantage plans. It's a winning blend for employers and their retirees who will have access to broad-based, affordable coverage from two companies widely recognized for their service excellence."
"Cigna and Humana are driving innovation through this unique alliance," adds Thomas Liston, Humana senior vice president of senior products. "We are excited that Cigna will be exclusively supplementing its retiree offerings with Humana's Medicare Advantage plans, enabling Cigna to offer a cost-effective, one-stop solution."