AM Best Comments on Health Care Service Corporation’s Planned Acquisition of The Cigna Group’s Medicare Business

AM Best has commented that the Credit Ratings (ratings) of Health Care Service Corporation, a Mutual Legal Reserve Company (d/b/a Blue Cross Blue Shield of Illinois/Texas/New Mexico/Oklahoma/Montana) (HCSC) (headquartered in Chicago, IL) and its subsidiaries (see listing below) remain unchanged following its announcement that it has entered into a definitive agreement to acquire all of The Cigna Group’s (Cigna) (headquartered in Bloomfield, CT) [NYSE: CI] Medicare Advantage, Medicare Part D, Medicare Supplement and CareAllies businesses.

AM Best anticipates that HCSC will maintain its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and its overall balance sheet strength. The transaction is projected to have a limited impact on HCSC’s overall balance sheet metrics, and financial leverage is expected to remain within AM Best’s tolerances with interest coverage remaining strong. The transaction is expected to expand HCSC’s geographic diversification with the addition of business outside of HCSC’s core Blue Branded states. Additionally, the additional membership and revenues will aid in providing additional scale and capabilities to HCSC’s Medicare Advantage business.

The transaction is expected to close in the first quarter of 2025, subject to regulatory approval and customary closing conditions. AM Best will continue to closely monitor the transaction and the impact to the HCSC and its subsidiaries.

The ratings of Health Care Service Corporation, a Mutual Legal Reserve Company and its following subsidiaries remain unchanged following the aforementioned announced acquisition agreement:

• Health Care Service Corporation Group
• Dearborn Life Insurance Company
• Dearborn National Life Insurance Company of New York
• GHS Health Maintenance Organization, Inc.
• GHS Insurance Company
• HCSC Insurance Services Company
• Health Care Service Corporation-Texas HMO Line of Business
• Health Care Service Corporation-Illinois HMO Line of Business

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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