MANAGED CARE May 2010. ©MediMedia USA
This is just one of the many questions that surely need to be addressed when you form the sort of partnership that the two large insurers announced in April. They hope to combine resources to capture the business of employers that offer health benefits to their retirees.
Humana brings to the deal dozens of Medicare Advantage plans that it offers throughout the nation. Cigna brings its huge customer base and presence in every state along with a client list that includes some of the country’s largest employers.
The partnership is even more unusual than one involving UnitedHealthcare and Towers Watson, described in MANAGED CARE last month. There, the deal was forged between an insurer and a consulting company in an effort to turn retiree benefits from a defined benefit into a defined contribution.
Les Funtleyder, an analyst at the consulting company Miller Tabak, tells the Associated Press that the Cigna-Humana partnership makes sense because the product lines of the two insurers don’t really overlap.
Sam Srivastava, Cigna’s president of government segments, says that “Through this alliance, we can expand Cigna’s portfolio, while Humana is able to expand its distribution to a larger base of employer customers for its Medicare Advantage plans.”
The partnership may be a harbinger, as health plans grapple with life after health reform, says Funtleyder. Maybe, but in both the Cigna-Humana deal and the UnitedHealthcare-Towers Watson partnership, the parties were talking before health reform became law.
“Had health reform not been passed, this would still make sense for both firms,” Humana spokesman Tom Noland tells the AP.