Humana, Cigna report Q3 earnings amid lawsuits and rumors

Cigna CEO David Cordani was quick to divert focus from rumored talks of a merger with Humana during the company’s Q3 earnings call on October 31.

“We don’t comment on rumors. But what I will do is be very clear on the actions we are pursuing,” Cordani said near the beginning of the call.

Amid current marketplace disruptions, like increased medical costs and drops in Medicare Advantage star ratings, he said the company has instead focused and will continue to focus on share repurchasing. This strategy led to a profitable quarter overall, with total Q3 revenue at $63.7 billion—up 30% compared to Q3 2023 of $49 billion and above Wall Street’s $59.4 billion expectations, according to Reuters.

“Our actions and our behaviors are consistent with what we said they were going to be, specifically using our discretionary free cash flow for share repurchase,” Cordani said on the call.

Rumors rejected. Bloomberg News reported on October 18 that Cigna and Humana had revived private, “early stages,” and “informal” discussions about a potential deal after prior merger talks fell apart at the end of 2023, anonymous sources familiar with the matter told the outlet.

But the only sale on Cigna’s horizon—at least the only one mentioned on the call—appears to be the planned sale of its Medicare Advantage Business to Health Care Service Corporation in Q1 2025. The majority of proceeds will go toward—you guessed it—share repurchase, Cordani said.

Humana, meanwhile, also didn’t address the merger rumors in its October 30 earnings call.

In positive news for the nation’s second-largest health plan provider, the insurance giant reported $29.4 billion in Q3 2024 revenue compared to $26.4 billion in Q3 2023 revenue. James Rechtin, Humana CEO and president, said on the call that this beat the quarter’s expectations.

Star ratings in focus. But most of the earnings report focused on Humana’s low 2025 Medicare star ratings.

Only about a quarter of the company’s members are enrolled in plans at four stars or higher for 2025—down from 94% of its total 6.4 million members, Healthcare Brew previously reported.

“We’ve acknowledged now that we’ve got work to do to get back to the results that we expect of ourselves and that we expect for our members and our patients and our investors,” Rechtin, who has been CEO and president since July, said during the Q3 earnings call.

On October 18, the insurer followed the lead of some of its peers, including UnitedHealth Group, and sued the federal government over its low Medicare Advantage star ratings, arguing the Medicare program’s criteria was “arbitrary and capricious.”

Along with its legal battle, the insurer is also focused on filling gaps in care, investing in technology—including improving its plan finder—and increasing member outreach, Rechtin said on the call.

Legal battles ramp up. Cigna, meanwhile, also has its hands full with a lawsuit. On September 17, Cigna’s Express Scripts, one of the largest pharmacy benefit managers (PBMs) in the US, sued the Federal Trade Commission in a Missouri federal court over a “defamatory” July report on PBMs. The report alleged that these “powerful middlemen inflate drug costs” to the detriment of patients and independent pharmacies.

The FTC on September 20 then sued Cigna’s Express Scripts and two other top PBMs over allegations of “artificially inflating insulin drug prices.”

“Specific to the FTC report, let me be really clear: We disagree on the unfounded assertions that were put forth,” Cordani said on Cigna’s call.