The Cigna Group has closed the sale of its Medicare health benefits businesses and a medical care … [+] provider services operation to Health Care Service Corp., the parent of five Blue Cross and Blue Shield health insurance plans. In this photo is, Blue Cross Blue Shield Tower on July 09, 2014 in Chicago, Illinois. It is the home of Health Care Service Corp. and Blue Cross and Blue Shield of Illinois. (Photo By Raymond Boyd/Getty Images)

2014 Raymond Boyd

The Cigna Group has closed the sale of its Medicare health benefits businesses and a medical care provider services operation for $3.3 billion to Health Care Service Corp., the parent of five Blue Cross and Blue Shield health insurance plans.

According to terms of the deal first announced last year, Health Care Service has acquired Cigna’s Medicare Advantage plans, Cigna supplemental benefits, Medicare Part D drug benefits and CareAllies, a business that helps medical care providers with various administrative services and contracting.

Chicago-based Health Care Service operates Blue Cross and Blue Shield health insurance plans in Illinois, Texas, Oklahoma and New Mexico, with more than 23 million people across the country in its various benefits plans, and is looking to grow its Medicare Advantage product offerings, which are minimal compared to other large health insurers.

Medicare Advantage plans, which are now the health insurance choice for more than half of America’s seniors over the age of 65, contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some also offering vision, dental care and wellness programs.

But neither Health Care Service’s nor Cigna’s Medicare health insurance operations are as large as UnitedHealth Group’s UnitedHealthcare, CVS Health’s Aetna health insurance business or Humana’s Medicare health plans, which all have several million Medicare Advantage enrollees.

Cigna’s decision to exit the Medicare business comes as some of its rivals have scaled back on their Medicare Advantage footprints this year.

Cigna had about 589,000 Medicare Advantage enrollees at the end of last year, which was down 2% from 2023, according to its latest earnings report. Cigna also had 2.5 million people enrolled in its Medicare Part D drug plans.

The acquisition will make Health Care Service Corp. a player in Medicare Advantage in the markets where it often is the largest provider of commercial health insurance coverage. Health Care Service now serves 26.5 million people, including 4.3 million Medicare members, the company said.

“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,” said Maurice Smith, HCSC’s CEO, President and Vice Chair. “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. We are excited to welcome our new Medicare members and the employees who will continue to help them achieve their best health.”

Cigna Group said it will “continue to provide pharmacy benefit services and other solutions to Medicare members” through its Evernorth Health Services business, which includes the pharmacy benefit management company Express Scripts,” as part of the deal. “We remain committed to serving Medicare populations through the portfolio of products and services we offer through Evernorth Health Services,” said Cigna chairman chief executive David Cordani.