Here is what you’ll find in this week’s newsletter!

1. Important links 🔗 - the best articles we found this week about the Medicare Market along with links to Jared’s recent LinkedIn posts.

2. Deep Dive 📚 - HCSC + Cigna Medicare: The Post-Deal Landscape

3. Sponsor Snapshot 🚀 - brought to you by Quote Velocity

4. Compliance Chatter 📢 - Several new regulations to review!

It’s only a 5 minute read, but it will make you 10x smarter.

DEEP DIVE 📚

HCSC + Cigna Medicare: The Post-Deal Landscape

In early 2024, Health Care Service Corporation (HCSC)—the Blue Cross and Blue Shield licensee for Illinois, Texas, Oklahoma, New Mexico, and Montana—announced it would acquire Cigna’s Medicare business for $3.3 billion (link).

That transaction closed in March 2025 (link).

While HCSC has long been a major player in the group and individual commercial markets, its Medicare Advantage footprint has remained modest…until now. With this acquisition, HCSC more than triples its Medicare Advantage enrollment, adds significant PDP and Med Supp scale, and picks up CareAllies, a provider enablement platform serving risk-bearing physician groups.

This deep dive explores how HCSC’s health insurance profile changes after the deal, using historical NAIC data to track membership, premium, and claims before and after the acquisition. We highlighted key shifts in risk mix, geographic reach, and strategic positioning.

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🧾 Transaction Overview: Cigna → HCSC

Acquirer: Health Care Service Corporation (HCSC)
Seller: The Cigna Group
Announced: January 31, 2024
Closed: March 19, 2025
Purchase Price: $3.3 billion
Assets Acquired:

• Medicare Advantage plans (~700,000 members)

• Medicare Supplement business (~500,000 members)

• Medicare Part D (PDP) (~2.9 million members)

• Ancillary Products (DVH, CI, Accident, HIP, etc.) (estimated ~390,000 members)

• CareAllies, Cigna’s provider enablement subsidiary

Additional Terms:

• Evernorth (Cigna’s services arm) retains the PBM and will continue to provide services to HCSC for several years post-acquisition.

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To assess the impact of the acquisition, we used 2024 NAIC Accident & Health (“A&H”) Experience Exhibit data for both HCSC and Cigna.

In other words, we are looking at past results (before the acquisition), to gain some understanding of what their combined results will look like going forward. (Naturally, future performance will vary.)

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Overall Premium, Loss Ratio and Margin Impact on A&H Business

Based on our analysis of the NAIC’s A&H experience data, the Cigna blocks acquired by HCSC earned $11.8 billion in Premium in 2024.

When combined with HCSC’s A&H 2024 Premium, the acquisition increases total A&H earned Premiums by ~19%.

Note: the $3.3 billion purchase price is ~0.27 x the 2024 earned premium of the acquired block.

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The acquired Cigna blocks generally reported lower loss ratios than HCSC, resulting in a slight improvement when combined.

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When combined with HCSC’s A&H 2024 Gross Profit, the acquired block increases HCSC’s A&H gross profit (Earned Premium - Incurred Claims) by ~23%.

Note: the $3.3 billion purchase price is ~2.4 x the 2024 gross profit (of the acquired block).

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Medicare Advantage enrollment

The Medicare Advantage business unit is the largest component of the acquisition.

The acquisition moves HCSC from 0.65% market share pre acquisition (~225,000 enrollees) to the 2.7% market share (~940,000 enrollees) post acquisition.

HCSC is now the 7th largest MA carrier Nationally!

Footprint expansion: From 5 states to 33 states with individual MA enrollees.

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Medicare Supplement enrollment

The acquisition moves HCSC from 4% market share (~565,000 enrollees) to 7% (~1.06 million enrollees) (based on 2024 results).

This move makes HCSC the 3rd largest Med Supp carrier.

Footprint expansion: From 5 states to 50 states with individual MS enrollees.

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PDP enrollment

The acquisition moves HCSC from 1% market share pre acquisition (~240,000 enrollees) to the 14% market share (~3,260,000 enrollees) post acquisition.

HCSC is now the 4th largest Carrier in the PDP market!

Footprint expansion: From 5 states to 50 states with individual PDP enrollees.

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HCSC’s $3.3 billion acquisition of Cigna’s Medicare business is more than just a scale play, it’s a strategic shift. With the deal now closed, HCSC’s Medicare Advantage enrollment more than triples, its PDP book becomes one of the largest in the country, and its Med Supp block vaults into the top three nationally.

The data shows that Medicare now makes up nearly a quarter of HCSC’s total health insurance premium—up from ~10% pre-deal—and the organization’s risk profile is meaningfully more diversified across funding sources and geographies.

While integration challenges lie ahead—particularly aligning quality scores, managing dual PBM relationships, and improving the profitability of the acquired MA block—HCSC is now positioned to compete more directly with national incumbents like Humana and CVS.

The next phase will be telling: Can HCSC maintain underwriting discipline, accelerate STARS improvement, and turn the Cigna MA block into a strategic asset rather than a financial drag?

For the first time, HCSC is not just a dominant Blues plan in five states—it’s a national Medicare competitor.

If you’re ready, here are some ways we can help you:

• Newsletter Sponsorship opportunities: Promote your product or services to leaders in the Medicare space. Let’s discuss. (link)

• Market Research: Reports that help you wrap your arms around the Senior focused insurance markets. (link)

• Consulting: We can help you develop new insurance products for the Medicare market, appraise your books of business, and keep you compliant. Let’s discuss. (link)