The Cigna Group reported robust financial performance for the second quarter of 2026, with total revenues increasing 7% year-over-year to $71.7 billion. Adjusted income from operations for the quarter was $2.1 billion, or $7.78 per share, exceeding expectations. The company also raised its 2026 outlook for adjusted income from operations to at least $30.45 per share. Cigna Healthcare's pre-tax adjusted earnings grew 17%, reaching $1.3 billion on $11.8 billion in revenue, driven by strong performance in its U.S. Employer business. The Medical Care Ratio for Cigna Healthcare was 84.5% for the quarter. Within Evernorth, the Pharmacy Benefit Services business delivered $609 million in pre-tax adjusted earnings.
Cigna announced a significant strategic shift, stating it will exit the Affordable Care Act (ACA) individual exchange business starting in 2027. This decision is aimed at refocusing resources on higher-growth segments, including specialty and care services, the pharmacy benefit services business, and the flagship U.S. employer business, particularly targeting employers with fewer than 500 employees and offering add-on products. CEO David Cordani emphasized a "relentless drive" for affordability and personalized experiences, leveraging AI and clinical programs to improve health outcomes and reduce costs, with programs showing a $2,000 per year average reduction in medical costs per customer.
The company is also making substantial progress with its new "Signature" rebate-free Pharmacy Benefit Management (PBM) model, which is compliant with Consolidated Appropriations Act provisions effective mid-2028. This model is designed to simplify pharmacy benefits and offer greater budget predictability through fee-based arrangements, guaranteeing the lowest out-of-pocket cost for members, potentially saving 30% per month on branded medications. Cigna sees "significant early interest" from health plans and employers, with plans for a broader market launch in 2028 after introducing it to Cigna Healthcare's fully insured plans next year. Retention in the pharmacy benefit services business remains strong, with over 97% retention in 2026 and similar projections for 2027, and 2027 new business performance is described as very strong, exceeding the prior two selling seasons combined.
Looking ahead, Cigna expects full-year pre-tax adjusted earnings for Evernorth to be at least $6.9 billion and raised its full-year pre-tax adjusted earnings outlook for Cigna Healthcare to at least $4.55 billion. The company anticipates third-quarter earnings seasonality consistent with prior years for Evernorth and expects third-quarter pre-tax adjusted earnings for Cigna Healthcare to be over 60% of the second-half earnings. Overall cost trends are noted as elevated but stable, and the company continues to focus on disciplined pricing and execution, including in its stop loss business to recapture margin.
