Evernorth growth fuels strong revenues for Cigna in Q2

Photo: d3sign/Getty Images

Major insurer Cigna outperformed industry expectations in the second quarter of 2023, riding sustained growth at subsidiary Evernorth and raking in $48.6 billion in revenues, with shareholders' net income hitting $1.5 billion, or $4.92 per share.

The Cigna Group's adjusted income from operations for second-quarter 2023 was $1.8 billion, or $6.13 per share, compared with $2 billion, or $6.20 per share, for Q2 2022, "primarily reflecting the absence of income from divested businesses," the insurer said.

WHAT'S THE IMPACT

Total revenues and adjusted revenues for Q2 increased 7% from Q2 2022, which Cigna attributed to strong contributions from Evernorth, its health services division, and from Cigna Healthcare.

Cigna Chief Financial Officer Brian Evanko said during an earnings call this week that Evernorth continues to deliver strong performance, with revenues growing 10% to $38.2 billion. The results, said Evanko, "were driven by continued strong performance in our differentiated specialty pharmacy business, which had year-over-year revenue growth in the mid-teens, and our focus on providing a variety of solutions that drive affordability and lowest net cost for our customers and clients."

Evanko said the business's diversified solutions allow it to sustain momentum by delivering differentiated value to customers and clients.

As for Cigna Healthcare, revenues grew 12% to $12.7 billion. The medical care ratio was 81.2%, reflecting items specific to Cigna's individual exchange business that Evanko said largely offset one another during the quarter. After receiving its first view of industrywide risk adjustment data in early July, Cigna increased its full-year 2023 estimated individual exchange risk adjustment payable.

"It's important to note, this was primarily driven by two states," said Evanko. "Within those two states, the unfavorable impact from the first half of 2023 was about $80 million and was recognized in the second quarter. We expect a similar magnitude of impact in the back half of the year. Additionally, this impact is isolated to the 2023 calendar year, as we have taken corrective pricing actions and the impact to geographies in our 2024 rate filings."

He added that the unfavorable risk adjustment payable impact was largely offset by a favorable update to Cigna's 2022 risk adjustment receivable within the individual exchange business.

In other results, Cigna's total pharmacy customers increased 5% since Dec. 31, 2022 to 98.6 million. Total medical customers grew 8% over that same time period to 19.5 million, an increase of 1.5 million customers that was primarily attributed to growth in U.S. commercial fee-based customers as well as in individual and Medicare Advantage customers. Its Medicare Advantage customer base grew 12%.

"Our Medicare Advantage business is achieving above-market customer growth with high-quality affordable plans and targeted investments that we continue to make to further strengthen our network and offerings," said Cigna Chairman and CEO David Cordani.

THE LARGER TREND

Cigna Group, Cigna Healthcare and Evernorth Health Services are now three distinct brands within the company, part of a rebranding initiative announced in February.

The new holding company name is the Cigna Group, the company announced. It employs more than 70,000 people and maintains sales capabilities in more than 30 countries and jurisdictions, the organization said.

Of the sub-brands, Cigna Healthcare is the health benefits provider of the Cigna Group, serving customers and clients through its U.S. Commercial, U.S. Government and International Health businesses. 

Evernorth Health Services, meanwhile, partners across the healthcare system to serve customers and clients, including health plans, employers, government entities and others. It creates pharmacy, care and benefits solutions. Its capabilities are powered by Express Scripts, Express Scripts Pharmacy, Accredo, eviCore, MDLIVE and myMatrixx.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com