Cigna's medical use trends in line with projections for 2023, 2024 -GS conference
Adds details from the conference call throughout
By Amina Niasse and Pratik Jain
NEW YORK, June 11 (Reuters) -Health insurer Cigna's CI.N medical use trends across its portfolio were in line with its expectations for 2023 and 2024, CFO Brian Evanko said on Tuesday, citing the company's lack of Medicaid management.
The company has also reaffirmed its adjusted annual profit forecast made in May, Evanko said at the Goldman Sachs Global Healthcare Conference. The majority of Cigna's business is from managing employer-based healthcare plans.
It raised its annual profit forecast in May for the second time this year, in sharp contrast to some rivals that are struggling with rising costs due to a much larger presence in the government-backed Medicare Advantage (MA) market for adults aged 65 and older.
During the COVID-19 pandemic, Medicaid plans were required to keep individuals enrolled. Following the termination of that policy in 2023, redeterminations for Medicaid eligibility have been prolonged.
Insurers saw unanticipated use of healthcare plans by patients following the pandemic. Cigna continues to expect an adjusted profit of at least $28.40 per share in 2024.
At a conference last month, UnitedHealth's CEO Andrew Witty said his company expected "some disturbance" around medical services used by Medicaid members.
Shares of Cigna fell 0.2% to about $338 in afternoon trading. UnitedHealth shares were down 3.8% at $484.72, while those of rivals Humana, Centene and Elevance Health fell 1.1%, 3.1% and 2.6%, respectively, following the conference.
Cigna's "outpatient dynamic" was also impacted by the Change Healthcare hack which disrupted claims during the first quarter of 2024, Evanko said.
The February ransomware attack on UnitedHealth stolea "substantial portion" of personal data from American patients and disrupted provider payments. UnitedHealth's Witty said in a May testimony that the hack caused "incredible disruption" across the healthcare system.
Evanko said Cigna had been affected by the disruptions caused by the hack but was returning to normal.
"But for the balance of the year, we're expecting that kind of normalized level to persist," he said.
Reporting by Caroline Humer, Amina Niasse and Pratik Jain; Editing by Chizu Nomiyama and Susan Fenton
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