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Health insurers Cigna and Humana are exploring a merger, and a deal may come as soon as the end of 2023, people familiar with the matter told the Wall Street Journal.
If an agreement is reached, the combined insurance company would rival giants UnitedHealth Group and CVS Health in size, the latter of which owns the insurer Aetna, the WSJ reported on Wednesday afternoon.
Both Cigna and Humana are already major players in the health insurance market. Cigna’s market value was around $83 billion and Humana’s stood at about $62 billion as of November 29, according to the WSJ. In 2022, Cigna reported $180.5 billion in revenue and Humana reported nearly $93 billion.
According to the WSJ, the two companies each have something the other wants: Humana has a strong Medicare business and Cigna has a large pharmacy benefits business.
Humana could also help Cigna advance its value-based care strategy, and Humana’s home health business could help grow Cigna’s Evernorth unit, the WSJ reported.
The two companies have already taken steps to avoid antitrust concerns. Cigna has looked into selling its Medicare Advantage business, Reuters reported earlier this month. And per the WSJ, Humana divested its commercial business in February.
This isn’t the first time Cigna and Humana have explored combining. The two companies looked into a merger deal in 2015, but Humana decided to target Aetna instead, the WSJ reported, though antitrust regulators blocked the move, and CVS later bought Aetna in 2018.
If the Cigna and Humana merger is successful this time, it would be the largest in 2023 across all industries, according to the WSJ.