Cigna-Humana Merger Talks Back On: Potential Industry Shake-Up

After previous discussions stalled last year, informal talks have reportedly resumed, according to Bloomberg sources familiar with the matter.

Cigna and Humana have reignited merger talks, potentially setting the stage for a healthcare industry shift. After previous discussions stalled last year, informal talks have reportedly resumed, according to Bloomberg sources familiar with the matter.

Cigna initially began merger discussions with Humana in November 2023, but the talks were quickly put on hold. 

According to people close to the current situation, the discussions are still in the early stages, and no official agreement has been made. 

Cigna reportedly aims to complete the sale of its Medicare Advantage business before moving forward with any major deals.

"These discussions are informal, and it's important to note that no final decision has been made at this stage," said the sources. The companies could choose not to pursue the deal or might look to push the negotiations into next year.

Potential Market Impact

If the merger were to proceed, the combined entity could become a significant player in the healthcare industry, potentially rivaling major competitors such as UnitedHealth Group and CVS Health. 

The merger would create a company capable of expanding its presence in key markets, particularly in Medicare Advantage, a sector both Cigna and Humana have heavily invested in. 

However, the Federal Trade Commission (FTC) has shown a heightened focus on healthcare mergers, recently increasing its premerger notification requirements.

Cigna and Humana have both been involved in previous merger attempts that federal regulators blocked. 

In 2017, Cigna’s merger with Anthem, now known as Elevance Health, fell through due to regulatory pushback. Around the same time, Humana’s attempted merger with Aetna was similarly halted. CVS Health has since acquired Aetna.

FTC Scrutiny Looms Over Healthcare Deals

The resurgence of merger talks between Cigna and Humana comes as the FTC tightens its stance on mergers in the healthcare industry. The commission recently ramped up its premerger reporting requirements, ensuring greater scrutiny of large-scale deals. Cigna is already under investigation by the FTC for its role in the pharmacy benefit management (PBM) industry, a factor that could further complicate any potential merger.

While no spokespersons from Cigna or Humana have publicly commented on the recent talks, both companies will likely have to navigate federal scrutiny closely if they intend to proceed with the merger. The FTC has been particularly vigilant in monitoring deals that could reduce competition in the healthcare industry.

Despite the optimism surrounding the talks, it remains unclear how long the discussions will continue or whether a deal will materialize. 

For now, the healthcare sector is keeping a close watch on the developments between the two insurers, as any potential merger could have far-reaching consequences for competition and pricing within the industry.