Cigna 2014 Annual Report Download - page 40

PART I
ITEM 1. Business
Our principal competitors in the U.S.-based business are: capabilities, along with decision support tools (some of which are
web-based) and enabling technology are critical to success in the
other large insurance companies that provide group health and life health care industry, and we believe our capabilities in these areas will
insurance products; be competitive differentiators.
Blue Cross and Blue Shield organizations; The health insurance marketplace will continue to be shaped by
Health Care Reform. In 2016, Health Care Reform expands the small
stand-alone HMOs and PPOs;
group market definition to employers with 100 or less employees,
HMOs affiliated with major insurance companies and hospitals; subjecting insurers in this market to community rating. The results of
and the 2014 Congressional elections add additional uncertainty as to the
effects that Health Care Reform may have going forward. See the
national managed pharmacy, behavioral health and utilization
‘‘Regulation’’ section of this Form 10-K for additional information
review services companies.
regarding Health Care Reform.
The primary competitors of the international health care business
On February 20, 2015, CMS issued its Advance Notice of
include U.S. and European health insurance companies with global
Methodological Changes for Calendar Year 2016 for Medicare
health benefits operations. The primary competitors for our
Advantage Capitation Rates, Part C and Part D Payment Policies (the
international health care operations in the United Kingdom and Spain
‘‘Notice’’). The final terms are expected to be published on April 6,
are regional and local insurers.
2015. While the terms contained within the Notice are within the
Competition also arises from smaller regional or specialty companies range of our expectations, there remain numerous open issues and
with strength in a particular geographic area or product line, substantial uncertainties regarding the final terms of the Notice. We
administrative service firms and, indirectly, self-insurers. In addition expect that CMS will receive a significant number of comments from
to these traditional competitors, a new group of competitors has interested parties (including Cigna) prior to issuing the final terms;
emerged. Some of these newer competitors, such as hospitals and however, there can be no assurance that CMS will amend its current
companies that offer web-based tools for employers and employees, positions. Given the uncertainty regarding the final terms of the
are focused on delivering employee benefits and services through Notice, we cannot reliably estimate the impact on our business,
internet-enabled technology that allows consumers to take a more revenues or results of operations in 2016 and beyond; under certain
active role in the management of their health. This can be circumstances, it is possible that the impact could be materially
accomplished through financial incentives, access to enhanced quality adverse. In addition, we expect to adjust our programs and services in
medical data and other information sharing. The effective use of our response to the proposed 2016 terms.
health advocacy, customer insight and physician engagement
Global Supplemental Benefits
Our Global Supplemental Benefits segment offers supplemental
Principal Products and Services
health, life and accident insurance products primarily in Asia, Europe
and the United States. With local licenses and partnerships in
Supplemental Health, Life and Accident Insurance
approximately 15 countries and jurisdictions, we are able to offer Supplemental health, life and accident insurance products generally
products and services to local citizens and globally mobile individuals. provide simple, affordable coverage of risks for the health and
In China, Turkey, and India, we offer products and services through financial security of individuals. Supplemental health products
joint ventures. This segment constituted 9% of our consolidated provide specified payments for a variety of health risks and include
revenues for the year ended December 31, 2014. personal accident, accidental death, critical illness, hospitalization,
We continue to distinguish ourselves in the global supplemental travel, dental, cancer and other dread disease coverages. We also offer
health, life and accident businesses through our differentiated customers individual private medical insurance, term and variable
direct-to-consumer distribution, customer insights and marketing universal life insurance, and certain savings products.
capabilities. We enter new markets when the opportunity to bring our
product and health solutions is attractive. Over the past several years,
Medicare Supplement Plans
we have continued to extend our product offerings and geographic We offer individual Medicare Supplement plans that provide retirees
reach. For example, in 2014, we began offering products in India with federally standardized Medigap-style plans. Retirees may select
through our joint venture with TTK Group. In 2012, we extended among the various plans with specific plan options to meet their
our reach in Turkey through the joint venture with Finansbank and unique needs and may visit, without the need for a referral, any health
expanded into the U.S. Medigap and supplemental lines of business care professional or facility that accepts Medicare throughout the
through the acquisition of Great American Supplemental Benefits. United States.
8 CIGNA CORPORATION - 2014 Form 10-K
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