The health insurance industry has received a lot of backlash over managed care practices that hamper providers through prior authorizations and rampant denials of medical claims. The rise in medical benefit ratios (MBRs) paid by Medicare Advantage plans has squeezed the margins of major health insurance providers such as Humana company New York Stock Exchange: Hum, UnitedHealth Group New York Stock Exchange: United Nationsand CVS Health Company New York Stock Exchange: CVS. However, one major insurer saw things on the wall early on and divested its Medicare Advantage business to protect its margins.
Cigna Group Company New York Stock Exchange: The It is at the top of the health insurance food chain. The company has demonstrated its foresight and agility to quickly navigate the changing landscape of the healthcare industry within the medical sector.
How Cigna deftly navigates healthcare trends
Cigna Group Today
Cigna Group
As of 03:57 PM ET
- 52 week range
- $262.03
▼
$370.83
- Dividend yield
- 2.00%
- P/E ratio
- 26.36
- Price target
- $395.93
Cigna has deftly maneuvered and clawed its way around the health care landscape, jumping on trends early and weathering potholes along the way. They started their Medicare Advantage (MA) train in 2011, acquiring HealthSpring Inc. For $3.8 billion to increase the number of MA members from 46,000 to 400,000.
For over a decade, Cigna made billions from MA until their spider senses started working. They saw the writing on the wall and exited when inpatient utilization rates started to rise, selling off its Medicare Advantage business (along with Medicare Part D and Cigna’s supplemental benefits). Business) for $3.3 billion to Health Care Service Corporation (a major non-profit health insurance company that offers Blue Cross Blue Shield plans) in January of 2024. This is why rumors of Cigna acquiring Humana have emerged. It makes no sense, because they will return to the MA market, from which they just exited.
Cigna entered the lucrative pharmacy benefit management (PBM) business with its $67 billion acquisition of Express Scripts in December 2018. In doing so, it also acquired and utilized EviCore, a third-party medical benefits management (MBM) company. EviCore is often outsourced by insurance companies to use data analytics and AI-powered solutions to handle prior authorization and claims management services, ensuring that treatments are medically necessary. Critics point out that EviCore is more than a way to achieve this Reject outsourcing claims Shifting responsibility to a “neutral” third party. they It was allegedly set to automate claim denials and lengthen the prior authorization process in order to boost profit margins for health insurance customers.
US health care spending will rise by 7.5% in 2023
According to the Centers for Medicare and Medicaid Services, National Health Expenditure (NHE) data refer to health care spending in the United States. It grew by 7.5% year-on-year in 2023 To $4.9 trillion, or $14,570 per capita, representing 17.6% of GDP. Spending on private health insurance rose by 11.5% year-on-year. For the period 2023 to 2032, NHE is expected to grow by 5.6%, outpacing average GDP growth of 4.3%. Health care spending will continue to outpace inflation.
This ensures that healthcare is a growing industry, and, figuratively speaking, Cigna may be the nicest house in a tough neighborhood.
Evernorth’s 50% revenue growth drives Cigna’s 30% year-over-year revenue growth in Q3 2024
Cigna operates in two divisions: Evernorth Health Services and Cigna Healthcare. Evernorth operates the PBM, specialty pharmacy, and care delivery and management (EviCore) businesses. Cigna Healthcare is an insurance company that offers traditional health insurance plans. Cigna reported third-quarter earnings per share of $7.51, beating analysts’ estimates by 28 cents. Revenue rose a whopping 30% year over year to $63.7 billion, beating consensus estimates of $59.58 billion by more than $4 billion.
Cigna’s Medicare ratio remains one of the highest in the industry compared to its peers
Cigna Group stock forecast today
$395.93
41.87% upHe buys
Based on 15 analyst ratings
| High expectations | $438.00 |
|---|---|
| Average expectations | $395.93 |
| Low expectations | $348.00 |
Cigna Group stock forecast details
The Medicare Ratio (MCR) is the percentage of an insurance premium that is actually spent on medical care for its members. The higher the MCR, the less money the insurance company makes. Cigna’s medical MCR rate was 82.8%, up from 80.5% a year earlier, but much better than rival CVS’s MCR rate, which rose to 95.2% in the third quarter of 2024. Again, this shows how Cigna has protected its MCR Its MCR stock rose to 95.2% (from 85.7% the previous year) by maintaining its MA business, Which further demonstrates the deft agility by Cigna.
The average consensus target price for CI is $395.93which means an increase of 41.31%, The analyst’s highest price target is at $438.00. It has 13 analyst ratings of Buy and 1 Hold rating. The stock has a short interest of 1.69%.
CI forms a possible reversal pattern for ABCD
The ABCD reversal is a harmonic pattern consisting of four main points: reversal high, reversal bottom B, high C, and reversal bottom D. The reversal occurs when the stock bounces back through point B.
CI formed an ABCD pattern consisting of lower and lower lows which found support at the $273.14 Fib level. Daily flat VWAP is trying to hold support at $273.14 Fibonacci level, as CI is trying to trigger a Market Structure Low (MSL) buy signal above $284.29. The ABCD reversal breakout is triggered above the $306.66 level. The daily RSI has started to rebound at the 39 range. Fibonacci (Pullback support levels are at $273.14, $264.76, $252.87, and $214.88.
Actionable options strategies: Bullish investors could consider using cash-secured puts at Fibonacci retracement support levels to buy the dip. If the stock is allocated, writing covered calls at rising Fibonacci levels implements a wheel-to-income strategy plus a 2.00% dividend yield.
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