Cigna announced it will exit its individual exchange business at the end of the year, affecting 369,000 people across 11 states. The move, along with a planned sale of its Medicare Advantage business in 2025, indicates a shift toward employer-sponsored insurance and pharmacy services. A healthcare expert said the exit conflicts with Cigna’s core strengths, which include mid-market employers and alternative funding arrangements that align with ICHRAs. ICHRAs let employers provide tax-free funds for employees to buy individual health insurance plans, typically off-exchange. Adoption remains limited, with an estimated 400,000 to 800,000 U.S. residents using ICHRAs. Cigna confirmed it is exiting both on- and off-exchange individual markets, making ICHRA unavailable for Cigna. The expert suggested ICHRA growth may depend on large insurers promoting it.
"Cigna announced during its first quarter earnings call that it is exiting its individual exchange business or the Obamacare exchanges at the end of the year, affecting 369,000 Americans in 11 states. With this exit, combined with the sale of its Medicare Advantage business in 2025, it appears Cigna is shifting its focus entirely to employer-sponsored insurance and pharmacy services."
"ICHRAs - which some have called the future of individual insurance - allow employers to provide their employees with tax-free money so they can purchase their own individual health insurance plans. Advocates say ICHRAs offer more flexibility and allow employees to choose the plan that best suits their needs. They're typically offered off-exchange, meaning individuals shop for plans directly through the insurer versus healthcare.gov or a state-based exchange."
"So could Cigna's exit from the individual market be an indictment of ICHRA? Cigna confirmed to MedCity News that it is exiting the individual market both on and off-exchange, meaning ICHRA is off the table for Cigna. "Cigna has never hyped ICHRA at all," Gottlieb said. "But I think what we're seeing today, exiting the individual market, sort of means they're saying they don't see that much potential there.""
"He added that unless large insurers like UnitedHealthcare start talking about ICHRA, Gottlieb doesn't foresee ICHRA being a meaningful business oppor. Adoption of ICHRAs, while growing, is still relatively small. About 400,000 to 800,000 U.S. residents have ICHRAs, according to data from HealthSherpa."
Read at MedCity News
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