CIGNA Group has revived efforts to combine with its smaller rival Humana after merger talks fell apart late last year, according to sources familiar with the matter.
The two health insurance giants, with a combined market value of more than US$125 billion, have held informal discussions recently about a potential deal, said the sources who asked not to be identified because the talks are not public. The discussions are in the early stages, they added.
Shares of Humana were up 5.6 per cent after the close of regular trading on Friday (Oct 18), while Cigna fell about 5.3 per cent.
The talks come amid ongoing pressure from the federal government to control Medicare costs that have eaten away at Humana’s finances and market value. An agreement between the two would likely rank among the five biggest health insurance deals, based on data compiled by Bloomberg.
Cigna is looking to close the sale of its Medicare Advantage business in the coming weeks before committing to any other transactions, one of the sources said. That exit could help pave the way for a deal with Humana by removing areas of overlap that would draw scrutiny from antitrust regulators.
No decision has been made and Cigna or Humana could opt to push any deal past the new year or decide against pursuing one altogether, the sources said.
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Representatives for Cigna and Humana declined to comment.
Humana, whose stock has fallen 42 per cent this year, closed at US$267.14 a share in regular trading in New York on Friday, giving the company a market value of about US$32 billion. Cigna’s late-trading losses compounded an earlier 4.9 per cent drop to US$336 share, which gave the company a market value of US$94 billion.
Earlier talks
Cigna and Humana held talks to combine last year, but Cigna walked away after failing to agree on a price, Bloomberg News reported in December.
Humana is focused on private Medicare Advantage plans, a segment of the insurance industry squeezed by rising medical costs and stricter payment rules from the federal government. The company is on a multi-year path to get back to its target profit margins of at least 3 per cent in Medicare.
The insurer lost ground on crucial Medicare quality ratings linked to payments, a setback that threatens billions in revenue for 2026 and sent its stock price tumbling this month. One analyst called it a “worst-case scenario” for Humana.
Humana said it’s appealing the federal government’s quality ratings, which affect Medicare bonus payments in future years. The company has historically had strong quality scores. If it recovers next year, the company could restore that earnings power in 2027 and beyond. BLOOMBERG
