The Cigna Group reported a $300 million loss in the first quarter of 2024 due to a non-cash investment loss of $1.8 billion related to the impairment of VillageMD equity securities. This loss turned an otherwise profitable quarter into a loss, compared to the first quarter of 2023 when Cigna reported net income of $1.3 billion. Cigna’s Evernorth holds a minority stake in VillageMD, a clinic operator that is scaling back on its expansion efforts. In late March, Walgreens reported a $6 billion loss in its second quarter due to the loss in value of its controlling stake in VillageMD.
Tim Wentworth, the CEO of Walgreens, has described VillageMD’s expansion effort as needing to go on “a diet” and has slowed the number of clinic openings due to challenges in filling patient panels. Despite the loss from its clinic investment, Cigna’s underlying businesses performed well, with total revenue up 23% in the first quarter compared to the year-ago period. Cigna’s adjusted income from operations for the first quarter of 2024 was $1.9 billion, reflecting strong contributions from both Cigna Healthcare and Evernorth Health Services.
Cigna saw an increase in customers and health plan members across all its businesses. Total pharmacy customers increased by 25% due to new sales and expanded relationships. Total medical customers also increased, primarily reflecting a decrease in individual and family plans customers due to targeted pricing actions in certain geographies. Unlike other health insurance companies that are seeing profits impacted by seniors using more healthcare services in Medicare Advantage plans, Cigna did not report such issues.
Cigna remains on track to sell its Medicare Advantage business to Health Care Service Corp. The transaction is expected to close in the first quarter of 2025. The performance of Cigna’s businesses in the first quarter led management to increase its outlook for adjusted income from operations for the rest of the year to at least $28.40 per share. The company’s CEO, David M. Cordani, credited the strong first quarter results to the performance of Evernorth and Cigna Healthcare businesses, as well as their leadership in addressing the evolving needs of customers. Cordani expressed optimism for continued growth and momentum in 2024.
