Cigna, a global health insurance company based in the U.S., has announced the acquisition of HealthSpring, a health insurer specializing in Medicare Advantage plans. Cigna is looking to expand its presence in the Medicare sector as well as its senior care services. The move may be inspired by an aging populace that will soon enter the ranks of seniority, enabling them to take advantage of new insurance plans. The acquisition is priced at $3.8 billion.
HealthSprings serves more than 350,000 Medicare Advantage policyholders across 11 states. The insurer also boasts of a stand-alone Medicare plan covering prescriptions, which accounts for an additional 800,000 customers. HealthSpring has experienced steady growth since 2006, a fact that sparked Cigna’s interest in the senior care market. HealthSpring’s management and workforce will remain largely intact after the acquisition, though some changes will be made to policies to accommodate Cigna’s practices.
Cigna expects that the deal will come to a close during the first quarter of 2012. Any changes to the governance of policies will be made after the deal is finalized. Cigna’s move may inspire other health insurers to acquire small Medicare insurance providers as a new generation enters their twilight years.
The deal with HealthSprings marks the largest deal in Cigna’s history. The company is expected to continue its expansion of senior care, noting the promising growth opportunities found therein.