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Cigna May Divest Group Life Business To Keep Up With Rivals Buying Providers

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Reports Cigna may be looking to divest its group benefits business comes as rivals are spending billions of dollars to expand their medical care provider operations.

Cigna last year bought the pharmacy benefit manager Express Scripts in a deal that expanded the insurer's health benefits operations, offering employers and government clients a package of medical and pharmacy coverage options. But that deal did little to bolster Cigna's partnerships with providers of medical care that are increasingly falling under the umbrella of large health insurance companies.

Cigna chief executive David Cordani has said the company's strategy is to "focus on whole person health." And that may mean forming closer ties with the medical care providers actually treating the person.

Reuters Tuesday reported Cigna has hired an investment bank to shop the group benefits business, saying it could be valued at up to $6 billion. Cigna's group benefits operations include life insurance and disability benefits, which are businesses other big health insurance companies have already unloaded in recent years to free up cash for mergers and acquisitions.

Cigna wouldn't comment on the Reuters report in a statement Tuesday but said its executives are constantly reviewing "opportunities" in the market. "Given the dynamic marketplace, we continually review opportunities to ensure we continue to deliver value to our customers and clients,” a Cigna spokeswoman said.

Increasingly, health insurance companies are forming closer ties with medical care providers with UnitedHealth Group's Optum health services business gobbling up doctor practices and urgent care centers across the country. And last year, drugstore giant CVS Health bought the health insurer Aetna, which sold its life insurance and disability operations in 2017. CVS is now rolling out hundreds of HealthHubs staffed by nurse practitioners and other clinicians.

Meanwhile, Humana in the last two years has spent hundreds of millions of dollars on bolstering its Conviva medical care provider operations and buying large home care and hospice businesses. And Anthem, the nation's second-largest health insurer, has been buying some medical care providers, particularly those that treat Medicare patients in an effort to boost enrollment in its Medicare Advantage plans.

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