Cigna, Humana Merger Discussions Reportedly Revived

Key Takeaways

• Discussions over Cigna’s possible purchase of Humana reportedly have resumed after the two health insurers failed to strike a deal last year.
• Bloomberg said the talks are in their early stages.
• Humana has struggled lately as Medicare changes negatively impact results, while Cigna is selling its Medicare business to HCSC.

Humana (HUM) shares edged higher Monday morning on a report that The Cigna Group (CI) has resumed discussions to buy its smaller health insurance rival after negotiations fell apart last year. Cigna shares declined.

Bloomberg reported after markets closed Friday that the two companies have held informal talks about a deal recently, although they are in the early stages.

The news site noted that Humana has been suffering lately, in part because of government changes in the ratings for its Medicare plans. It pointed out that Cigna is looking to close the $3.3 billion sale of its Medicare Advantage business to Health Care Service Corporation announced last January, explaining that the offloading of its Medicare component would likely make a merger with Humana more likely to pass muster with regulators.

When reached by Investopedia, spokespersons for both Cigna and Humana said their firms don’t comment on market rumors and speculation.

Humana shares have lost more than 40% of their value this year. Cigna shares fell about 4.5% Monday morning but are about 7% higher in 2024.

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