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Cigna's (CI) 2022 Expansion Plans to Boost MA Customer Base

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Cigna Corporation (CI - Free Report) recently introduced its Medicare Advantage plans for 2022, which marks the third straight year of record geographic extension in Medicare Advantage (“MA”). The healthcare provider boasts of a strong MA network across the United States. Through this vast network, it has been consistently delivering cost-effective plans and catering to the diversified health needs of individuals.

With the expansion endeavor of 2022, Cigna intends to bolster its geographic reach with inclusion of 108 new counties, which comprises territories across three new states — Connecticut, Oregon, and Washington. Consequently, the latest announcement paves the way for the company’s MA business to serve 477 counties spread across 26 states and the District of Columbia.

During the 2022 Medicare Annual Election Period (“AEP”), which will start Oct 15 and run through Dec 7 this year, the plans available for purchase will be extensive and cost-effective ones and include several enhanced benefits. Besides, Cigna will distribute three stand-alone Prescription Drug Plans (“PDPs”) throughout the United States during next year. For specific Dual Special Needs Plans (“DSNP”), through which the company aims to serve people eligible for both Medicare and Medicaid, Cigna will provide a debit card to enable customers to pay for particular expenses.

These measures lead to improved health outcomes for Cigna’s MA customers as they have easy access to high-quality MA plans best suited to their diversified health needs.

Initiatives similar to the latest one underscore Cigna’s sincere efforts to bolster its MA customer base, which in turn, is expected to drive the company’s MA business. Since 2019, the geographic existence of the healthcare provider’s MA business has been boosted by 80%. The business has performed well courtesy of constant product expansions, growing membership, and new collaborations or contract extensions with renowned healthcare systems. This has been bolstering Cigna’s partner networks and strengthening its U.S. footprint.

Concurrently, growth in MA customers has fetched higher premiums for the company. This is quite evident from the top-line growth of 8.2% in the first half of 2021. Cigna remains well on track to achieve MA customer growth in the targeted range of 10-15% this year.

The MA market seems to be an attractive one for the company, considering the surge in enrollment figures and a growing U.S. aging population. It is worth mentioning that MA plans remain the preferred choice for consumers owing to several bundled benefits, improved care coordination and affordable nature, which make them a better option when compared to the traditional Medicare plans. Consequently, employers are intensifying focus on offering health insurance coverage to its retirees through rolling out a significant number of these plans.

For items that Original Medicare does not provide coverage to, Cigna provides Medicare Supplement plans across 48 states and the District of Columbia.

Another healthcare provider, UnitedHealth Group Incorporated (UNH - Free Report) , also declared its 2022 MA and prescription drug plans recently. In the next year, the company will expand its service area to reach 94% of Medicare consumers nationwide

Zacks Rank & Price Performance

Shares of Cigna, which carries a Zacks Rank #3 (Hold), have gained 17.7% in a year compared with the industry’s growth of 19.6%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks in the medical space include The Joint Corp. (JYNT - Free Report) and Acadia Healthcare Company, Inc. (ACHC - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Joint Corp. and Acadia Healthcare have a trailing four-quarter earnings surprise of 235.00% and 26.14%, on average, respectively.

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