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Cigna-Humana Possible Merger Explained With news that the Cigna-Humana merger could be back on, financial analysts are reviewing what it could mean for healthcare. The merger looks to be very complimentary, with very little overlap. A combined company would have a $121 billion market capitalization, still tiny compared with UnitedHealth Group’s $528 billion. On the insurance side, Cigna is a major commercial provider with 16.1 million members. Humana had fewer than 600,000 commercial customers and is closing this line down. Humana is the second-largest Medicare insurer with 8.8 million members (Medicare Advantage and standalone Part D PDP). It has about 1.2 million Medicaid lives. Cigna is selling its Medicare line to Health Care Service Corporation (HCSC, a big Midwest and South Blue). This began last year when the first talks were ongoing and continued after they broke down. Cigna CEO David Cordani felt too much would have to be invested

Humana Sues CMS Over Star Scores In the broadest lawsuit yet over Star scores, Humana has sued the Centers for Medicare and Medicaid Services (CMS) over its 2025 Star ratings. Lawsuits in 2024 from Scan and Elevance Health and in 2025 from United and Humana are relatively tame, arguing specific points of regulation or on a specific measure or measures. United has used the phrase “arbitrary and capricious” in detailing its lawsuit, but the Humana suit argues that in spades compared with United. Humana argues that the entire Star program is administered in an arbitrary and capricious manner in violation of the administrative procedures act. The argument has much greater significance now due to the Supreme Court striking down the so-called Chevron deference precedent, which gave agencies fairly wide-ranging authority to set regulations and interpret ambiguities. Of note, the suit has been filed in the Northern District of Texas before

CVS Ousts CEO Due To Financial Woes CVS Health ousted CEO Karen Lynch and replaced her with another insider, PBM President David Joyner. CVS also announced that investors can no longer rely on previous guidance from the company in terms of financial performance in 2024. CVS’ financial woes stem from its Aetna insurance business. It says its Aetna medical loss ratio (MLR) could hit 95.2% in Q3. This is stunnng given it has a substantial commercial line of business. CVS increased Medicare Advantage (MA) benefits phenomenally over the past few years and enrollment grew tremendously in 2024. This led to financial instability due to a number of inside and outside forces. I followed Lynch and met her a few times as Aetna’s leader. I found her an innovative and strong executive. She was dealt a bad hand since becoming CEO in February 2021. She had to weather the COVID pandemic,

Democratic Report Argues Medicare Advantage Plans Use AI To Reduce Post Acute Care An incredibly biased report engineered by Sen. Richard Blumenthal, D-CT, finds that the country’s three largest Medicare Advantage (MA) insurers – United Healthcare, Humana, and Aetna — obstruct seniors’ ability to receive post-acute care. It says the companies use technology (perhaps AI algorithms) to reject prior authorization claims. The report finds that the three insurers denied claims for post-acute care at “far higher” rates than for other types of care. Humana’s denials in post-acute care were 16 times higher than its overall denial rates. UnitedHealthcare and CVS denials were three times higher. I agree with the insurers that the report is sensationalistic. The report argues that at least two companies used AI and technology in denials. I do think a qualified professional should make the final clinical decision to deny a service. But what is lost on

Biden Leaving His Mark On Medicare Advantage A very good article from Bridget Early in Modern Healthcare on the history of Medicare Advantage (MA) and how the Biden administration is leaving its mark on the program. I do take issue with the continual citing of what I think is a terribly biased overpayment figure (in this article $83 billion and I have seen even more ridiculous figures). But she has an extremely balanced approach and quotes both sides of the debate (some of the most qualified you can find) and reasonably speaks to the potential damage in the form of benefit reductions and geographic contraction that is occurring due to certain policies. It gives you a good feel for MA’s history and what is going on today. The article does a good job at inventorying changes, including health equity, risk adjustment changes, supplemental benefit changes, marketing reform, and prior authorization

Mixed Signals On Medicare Advantage Open Enrollment The Medicare Advantage (MA) enrollment season officially kicked off today. While the Kaiser Family Foundation (KFF) finds that MA plans are largely stable, it does note that there are some reductions impacting consumers. Some beneficaries may be moved automatically to other plans by their current insurers. Others will have to make an affirmative choice. KFF promises to have a full review but appears to be putting the same spin on things as the Centers for Medicare and Medicaid Services (CMS). Others are saying that as many as 2 million will be displaced compared with the usual 100,000 each year. We covered some of the displacement yesterday for both MA and standalone Part D (PDP) plans. CNN correctly notes the displacement, citing an Oliver Wyman analysis that comes close to the 2 million number above. Oliver Wyman says more than 1.8 million MA members,