Cigna plans to eliminate prescription drug rebates in many of its private health plans by 2027, shifting to upfront discounts to lower patient costs and reduce the influence of rebates, which have been controversial and linked to higher drug prices. This move aims to increase transparency and potentially negotiate better drug prices, marking a significant change in the pharmaceutical and insurance industries.
UnitedHealth Group's stock is showing bullish technical signals, including a breakout above $315 and a potential move to $380, indicating a possible upward trend. Peer healthcare stocks like Cigna and Humana are also displaying positive patterns, with Cigna approaching a breakout above $308 and Humana experiencing a trend reversal with a seven-week winning streak, suggesting continued strength in the healthcare sector.
The article highlights the controversial practices of health insurers in the U.S., focusing on the use of artificial intelligence to deny claims rapidly, often without thorough review. It discusses cases like Megan Rothbauer's, who faced a massive bill due to being taken to an out-of-network hospital while in a coma. Insurers like Cigna and UnitedHealthcare are criticized for using algorithms to deny claims, leading to lawsuits and public outcry over their practices. The use of AI in claim processing is seen as a cost-cutting measure that often leaves patients with unexpected bills.
CVS Health, UnitedHealth Group, and Cigna have filed a lawsuit against the Federal Trade Commission (FTC), challenging the agency's case against pharmacy benefit managers (PBMs) over high insulin prices as unconstitutional. The companies argue that the FTC's administrative process violates their Fifth Amendment rights and should be handled in federal court. The FTC accuses the PBMs of inflating insulin costs through a rebate system. This legal battle follows the companies' request for FTC Chair Lina Khan and other commissioners to recuse themselves due to alleged bias.
Several major stocks, including AbbVie, Tesla, Cigna, and Morgan Stanley, experienced significant price movements during midday trading. These fluctuations are drawing attention from investors and analysts as they assess the factors driving these changes in the stock market.
Cigna Group has confirmed it is not pursuing a merger with Humana, despite recent speculation. The company remains focused on acquisitions that align with its strategic and financial goals. Cigna plans to reaffirm its 2024 earnings outlook and expects significant growth in 2025. The company's third-quarter sales increased by 30% year-over-year, driven by strong performance in its Evernorth Health Services division. Cigna's stock rose nearly 8% following the announcement, while Humana's stock fell over 6%.
Health Care Service Corporation is set to acquire Cigna's Medicare business for $3.7 billion, gaining control of Cigna's Medicare Advantage, Supplemental Benefits, and Part D customers, as well as the CareAllies business. The deal includes Cigna's Evernorth Health Services unit providing pharmacy benefits for four years. Cigna's CEO cited the need for sustained investment and dedicated resources for their Medicare businesses, while the acquisition is expected to bring opportunities for Health Care Service and its members. The deal is anticipated to close in the first quarter of 2025.
Cigna is selling its Medicare insurance plans, including Medicare Advantage, to Health Care Service Corp. for $3.3 billion, marking its exit from the Medicare business. The sale comes after a troubled history, including compliance issues and a settlement for alleged falsification of member diagnoses. The deal will expand Health Care Service Corp.'s government footprint and includes the use of Cigna's pharmacy benefit manager. Cigna will incur a $1.5 billion loss but plans to use most of the proceeds to buy back its stock.
Cigna is selling 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. The deal includes Cigna’s Medicare Advantage plans, supplemental benefits, Medicare Part D drug benefits, and CareAllies. Health Care Service Corp. aims to expand its Medicare Advantage product offerings and grow in the Medicare marketplace, where it currently has minimal presence compared to other large health insurers. The acquisition is expected to close in the first quarter of 2025, pending approval by antitrust regulators.
Cigna Group is in advanced discussions to sell its Medicare Advantage business to Health Care Service Corp in a deal potentially worth $3 billion to $4 billion. The sale would indicate a strategic shift for Cigna, which has seen the U.S. government reduce reimbursement rates for health insurers. Cigna's Medicare Advantage segment represents a small portion of its overall revenue, with the bulk coming from its commercial and pharmacy benefits divisions. The deal is expected to be announced soon unless negotiations falter.
Cigna is in the final stages of negotiations to sell its Medicare Advantage business to Health Care Service Corp. in a deal valued between $3 billion and $4 billion. This move represents a strategic shift for Cigna, which had previously been expanding in the Medicare sector. The sale comes after Cigna conducted an auction for the business, which generated approximately $7.9 billion in revenue in 2022 and had around 599,000 members as of the end of September.
Stocks such as Cigna, Macy's, Eli Lilly, RingCentral, Broadcom, Snap, Paramount, Shake Shack, and more are experiencing movement in the stock market following six consecutive weeks of gains for the S&P 500. This week's upcoming events include the release of the consumer price index for November, the Federal Reserve's decision on interest rates, and U.S. retail sales.
U.S. equities were little changed at midday as investors awaited key inflation data and the final Federal Reserve meeting of the year. Cigna shares surged after calling off a merger with Humana and announcing a $10 billion stock buyback, while Humana shares declined. Eli Lilly shares dropped following a study showing weight gain in patients who stopped taking the company's weight-loss drugs. Chipmakers, including Intel, saw their shares rise after the White House announced grants under the CHIPS and Science Act of 2022. Nike shares gained after a positive upgrade, and Paramount Global shares tumbled after a surge on Friday.
Cigna has reportedly ended its merger talks with Humana and instead announced a $10 billion increase in its buyback program. The companies were unable to agree on a deal price or terms. Cigna plans to repurchase at least $5 billion worth of shares by June 2024 and reaffirmed its earnings per share targets for 2023 and 2024. Cigna's stock initially tumbled following the news of the failed merger talks but jumped 13% on Monday, surpassing its 200-day line.
Macy's shares surge nearly 19% on reports of a $5.8 billion takeover bid, while Cigna drops plans to buy Humana and focuses on share buybacks instead. Paramount shares gain on talks of a sale to Skydance, Nvidia looks to expand operations in Vietnam, and Starbucks plans to resume talks with the union representing its baristas in January.
