Cigna profits up in 2022 thanks to subsidiary Evernorth

The insurance company said Friday that the growth of its healthcare subsidiary Cigna helped boost net income by 24% to $6.7 billion last year.

In 2022, revenue grew by 4% to $180.5 billion, according to Cigna’s financial report. The company’s Evernorth operations, which include pharmacy benefit management, a specialty pharmacy and healthcare delivery, generated $140.3 billion last year, up 6% from 2021.

Evernorth invested $2.5 billion to acquire VillageMD, a Walgreens Boots Alliance subsidiary, Summit Health-CityMD, creating a broad network of primary, specialty and emergency care providers.

“We continue to invest huge amounts of money in areas like our Evernorth care services platform to provide things like VillageMD, along with our specialty pharmacy business, which continues to grow at a very attractive pace,” Cigna CFO Brian Evanko told investors. . briefing on Friday.

Insurance membership grew by 5.4% to 18 million in 2022 thanks to commercial clients. The number of state-sponsored insurers has dropped slightly, in part because Cigna sold its Texas Medicaid operations to Molina Healthcare last January for $60 million.

Reduced COVID-19 treatment costs and “effective implementation of pricing and accessibility initiatives in commercial business in the United States” led to Cigna’s medical loss ratio dropping from 84% in 2021 to 81.7% last year, the company said.

Cigna expects Medicare Advantage enrollment growth to be in the single digits this year. According to CEO David Kordani, the program continues to provide significant growth opportunities.

On Wednesday, the Centers for Medicare and Medicaid Services announced that Medicare Advantage rates will increase by 2.09% in 2024. If the agency implements this policy as suggested, it will result in a “revenue sharing” that will encourage Cigna to use its value-based payments. arrangements that cover about three-quarters of Medicare Advantage members, Cordani said.

“The original rate letter that came out does indeed have a lower or somewhat anemic income. We will wait for the final evaluation letter to be submitted regarding this,” Kordani said.