November 29 2023: Cigna and Humana, two of the largest health insurers in the U.S., are reportedly in talks for a merger.

Cigna and Humana, two of the largest health insurers in the U.S., are reportedly in talks for a merger that would create a new giant in the industry. According to Reuters¹, the companies are discussing a stock-and-cash deal that could be finalized by the end of the year. If the deal goes through, it would be one of the biggest mergers in the history of health insurance, with a combined market value of $145 billion.

But what would this merger mean for the insurance market, consumers, and health care providers? Here are some possible implications:

**Insurance market:**The merger would reduce the number of major players in the health insurance market, especially in the Medicare Advantage segment, where Humana is a leader and Cigna is a smaller but growing competitor. The combined company would have more than 7 million Medicare Advantage members, making it the second-largest provider after UnitedHealth Group². This could raise antitrust concerns, as the Department of Justice blocked a previous attempt by Aetna to acquire Humana in 2017⁶. Cigna may be trying to preemptively address this issue by selling its own Medicare Advantage business, as reported by Reuters¹. However, this may not be enough to satisfy the regulators, who may also look at the impact of the merger on other markets, such as employer-sponsored insurance, individual insurance, and pharmacy benefit management.

**Consumers:** The merger could have both positive and negative effects for consumers, depending on their location, plan, and health needs. On the positive side, the merger could lead to lower costs and better quality for some Medicare Advantage members, as the combined company would have more bargaining power with providers and more scale to invest in technology and innovation. On the negative side, the merger could also lead to higher premiums and fewer choices for some consumers, as the combined company would face less competition and have more leverage over providers. The merger could also affect the availability and affordability of other types of insurance, such as employer-sponsored insurance and individual insurance, as the combined company would have a larger market share and influence in those segments.

**Health care providers:** The merger could also have mixed effects for health care providers, such as hospitals, doctors, and pharmacies. On the one hand, the merger could create more opportunities for collaboration and integration with the combined company, which could improve care coordination and outcomes for patients. On the other hand, the merger could also create more challenges and pressure for providers, as the combined company would have more negotiating power and control over reimbursement rates and network participation. The merger could also affect the relationship between providers and pharmacy benefit managers, as Cigna owns Express Scripts, one of the largest PBMs in the country.

The deal is not yet confirmed, and it may face regulatory hurdles and opposition from stakeholders. However, if it does happen, it would reshape the landscape of the health insurance industry and have far-reaching consequences for the health care system.

(1) Cigna, Humana in Talks for Blockbuster Merger. https://www.msn.com/en-us/money/companies/cigna-humana-in-talks-for-blockbuster-merger/ar-AA1kJIwm

(2) Cigna tumbles on Humana merger talk reports; FTC already probing PBMs. https://www.msn.com/en-us/money/other/cigna-tumbles-on-humana-merger-talk-reports-ftc-already-probing-pbms/ar-AA1kJUwr

(3) U.S. blocks health insurer Aetna’s $34 billion Humana acquisition. https://www.reuters.com/article/us-humana-aetna-antitrust-idUSKBN1572BF

(4) Cigna, Humana shares fall after report health-care giants are in talks to merge. https://www.msn.com/en-us/money/markets/cigna-shares-slide-after-report-it-could-merge-with-humana/ar-AA1kJL05

(5) Cigna faces questions about M&A strategy amid ‘arms race’ for deals. https://www.healthcaredive.com/news/cigna-merger-acquisition-strategy-insurers/635709/

(6) Is there more to Cigna’s Medicare Advantage moves? – STAT. https://www.statnews.com/2023/11/13/cigna-medicare-advantage/