Cigna: Insuring 10 million and counting

Cigna has announced plans to purchase Great-West Life & Annuity Insurance Co. of Denver. The purchase (worth $1.5 billion) would give Cigna a controlling stake in Great-West's parent company, Allegiance. Cigna would gain an 80% control of Allegiance's companies. Overall, things will not change much for employees or customers but things could progress positively. The new acquisition could provide customers with a wider variety and more affordable health insurance plans. Dirk Visser, CEO of Allegiance's parent company stated that the buy-out could enhance the benefits for the customers. The larger companies get a significantly better deal on prescription drugs. The deal could also create more competition in the region. Montana Blue Cross-Blue Shield currently controls 50% of the market. Cigna entrance into the market will certainly drive to the cost of health insurance and promote competition among the health insurance companies.

Cigna currently insures more than 10 million people and is one of the four largest in the nation. With their announcement to purchase Great-West Health Care, they would acquire an additional 2.2 million customers. Cigna has a very small market share in Montana, insuring only 8,000 people. The acquirement will give Cigna the ability to compete in the region and gain a larger market share which will result in lower prices and a wider variety of healthcare plans.

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