It looks like Cigna Corp. has found the health insurance industry’s sweetest of sweet spots. Two of the most lucrative places to be right now, if you’re Big Insurance, are the pharmacy benefit and Medicare Advantage spaces, and Cigna’s doing a great job of inserting itself into both.
The insurer is off to an incredibly profitable start this year, according to Modern Healthcare. Its adjusted Q1 revenue was $40.9 billion, a significant increase (remember, we’re talking billions!) from last year’s $38.4 billion.
These big Q1 numbers emboldened Cigna to beef up its revenue expectations for the rest of 2021. The company is now estimating consolidated adjusted revenues of (are you sitting down?) at least $166 billion, based in large part on its aggressive expansion plans for both Evernorth’s Express Scripts and the Medicare Advantage market. Cigna is also dialing up its Obamacare activity, with stated plans to double its presence on the exchanges by 2025. Finally, Cigna will continue its aggressive acquisition activity; Evernorth’s acquisition of MDLive was just the start.
So there you have it: the view from the top. But this bears looking at it from a different angle. At the moment, health insurers’ costs are unusually low because of the vast numbers of patients still not getting care due to the pandemic. Put another way, insurers’ massive profits are coming at the expense of patients not using their insurance.
As Cigna makes moves that have the potential to reshape the future of care delivery, we hope that they will keep in mind that bigger isn’t necessarily better.