UPDATED: 3:30 p.m. on Jan. 30
Cigna executives said that the company is on track to close the sale of its Medicare Advantage business in the first quarter of 2025, in line with its expectations.
The insurer announced plans to sell off its MA plans to Health Care Service Corporation in January 2024 in a deal valued at $3.7 billion. Chief Financial Officer Brian Evanko said that all federal antitrust approvals have been received, as have all but one state approval.
"We have a very collaborative, constructive relationship with HCSC," Evanko said.
He said that as Cigna developed its bids for 2025, it focused on a local market, county-level approach. He said the company saw an opportunity for "attractive growth" in MA, particularly with HMO plans in its more mature markets.
"The business is on a solid footing," Evanko said. "We're tracking for attractive growth in 2025, and we're ready to hand it off to HCSC."
The Cigna Group reported $1.4 billion in profit for the fourth quarter of 2024, falling short of Wall Street's expectations as it was dinged by elevated medical costs that continue to plague the industry.
Profits for the full year were $3.4 billion, down from the $5.2 billion the company reported in 2023.
Cigna said its medical loss ratio was 87.9% in the fourth quarter of 2024 compared to 82.2% in the prior-year quarter. For the full-year 2024, MLR was 83.2%, which was still higher compared to the 81.3% its insurance unit reported in 2023.
The insurer said the spike in its MLR was "primarily driven by higher stop loss medical costs," according to its earnings report released Thursday morning.
Cigna did beat the Street on revenue for the quarter, however, per Zacks Investment Research. The company reported $65.6 billion in revenue for the quarter, up from $51.1 billion in the fourth quarter of 2023.
Full-year revenues were $247.1 billion, growing from 2023's haul of $195.3 billion.
In the press release, Cigna CEO David Cordani said the company will be making adjustments to mitigate the impact of rising utilization.
"While higher medical costs in our stop loss product impacted fourth quarter earnings, we are taking corrective actions to address these near-term pressures and we are simultaneously taking steps to further advance our long-term growth strategy," Cordani said.
"Through a dynamic environment, we are continuing to focus on building a sustainable model for healthcare by addressing the areas that matter most to our patients and clients, including greater transparency, support and value," he said.
The company did highlight its Evernorth division as a bright spot, however. This unit includes pharmacy benefit manager Express Scripts, the Accredo specialty pharmacy, MDLive's telehealth services and other health services businesses.
Revenues at Evernorth were $53.7 billion, up from $40.5 billion in the prior-year quarter. The division brought in $202.5 billion in revenue for the full year, according to the report.
Revenues at Cigna Healthcare, the insurance division, meanwhile, were flat compared to 2023. The company reported $13.3 billion revenue for the fourth quarter of 2024 while revenues were $13 billion in the fourth quarter of 2023. Full-year revenues were $52.9 billion compared to $51.2 billion in 2023.
The company said it had 118.3 million pharmacy customers as of Dec. 31 as well as 19.1 medical benefit customers.
Cigna said it expects to bring it at least $252 billion in revenue for 2025 and also projected a full-year MLR between 83.2% and 84.2%.