Cigna Corp. is looking to expand its Medicare Advantage portfolio footprint in 2018, CEO, President and Director David Cordani said on the company's second-quarter earnings call.
Cordani said the company is actively enrolling members for the rest of 2017 and is "highly focused" for the open enrollment cycle coming in the fall. Medicare Advantage plans are generally full-service offerings for seniors that include prescription drugs and other benefits.
Cordani maintained that Cigna has had a "clear" track record of consistent and sustainable growth in its Medicare Advantage portfolio. He said the company has seen high customer retention levels as 85% of enrollees are in value-based programs, which focus on preventative care.
While the company will not expand into new Medicare Advantage coverage areas in 2018, Cigna is looking to expand into adjacent counties in 2019, he said.
Cordani said Cigna had expected to grow the business organically in 2018, but it is now looking to new investments and M&A to broaden its footprint. But, he said, the company will be "disciplined" as it eyes potential deals.
"And for 2018, I would just say very clearly, we expect to grow our [Medicare Advantage] portfolio," Cordani said. "The team is prepared and ready to roll for 2018 and we expect to grow."
CFO Eric Palmer said the company expects to have about $5 billion of cash available to deploy for the second half of 2017, coupled with the capacity to generate more deployable cash by increasing its debt-to-capitalization ratio to the mid-30s, bringing the total amount Cigna can use to about $7 billion. The company would consider that debt ratio to be a "normal range" going forward, he said.