Cigna 2011 Annual Report Download - page 25

3CIGNA CORPORATION2011 Form10K
PARTI
ITEM 1 Business
D. Health Care
Cigna’s Health Care segment (“Cigna HealthCare”) oers insured and
self-insured medical, dental, behavioral health, vision, and prescription
drug benet plans, health advocacy programs and other products and
services that may be integrated to provide comprehensive health care
benet programs. Cigna HealthCare companies oer these products
and services in all 50states, the District of Columbia and the U.S.
Virgin Islands.
Cigna HealthCare believes the most sustainable approach to enhancing
quality and managing health care costs is to fully engage customers in
the decisions that aect their health and the health care services they
receive. Accordingly, to assist customers in making informed choices
about health care for themselves and their families, Cigna HealthCare
provides personalized, actionable information about health and advocacy
programs as well as about the cost and quality of health care services.
Underlying Cigna HealthCare’s operations is a foundation of clinical
expertise and the ability to provide holistic, personal service. Cigna
HealthCare’s strengths include its ability to:
•
combine medical and specialty product oerings to achieve a more
integrated approach to customers’ health and promote consistent
care management;
•
provide predictive modeling and other analytical tools to assist in
providing targeted information for those customers with the greatest
health and lifestyle risks;
•
leverage Cigna’s investment in care management technology
(HealthEview
SM
) to create personalized care plans that adapt to each
customer’s preferences and individual health goals so that they can
make healthier lifestyle and health choices; and
•
collaborate with health care professionals through accountable care
organizations with the objective of improving the quality of care and
service experience for customers while lowering costs and improving
overall value.
Principal Products and Services
Cigna oers a variety of products and services to employers and other
groups that sponsor group health plans. With the exception of Health
Maintenance Organization (“HMO”), Medicare, Voluntary and stop
loss products, each of Cigna HealthCare’s products is oered with
alternative funding options (described below). Cigna may sell multiple
products under the same funding arrangement to the same employer.
Approximately 85% of the Company’s medical customers are enrolled
in self-insured plans, with the remainder split relatively evenly between
guaranteed cost and experience-rated insured plans. Approximately 90%
of our medical customers are enrolled in self-insured and experience-
rated plans, where lower medical costs directly benet our corporate
clients and their employees.
Cigna also oers guaranteed cost medical and dental insurance to
individuals; see the “markets and distribution” section for additional
information about the Company’s oerings in the individual and
family market segment.
In January2012, Cigna acquired HealthSpring,Inc. (“HealthSpring”),
which is one of the largest Medicare Advantage providers in the U.S.
HealthSpring oers Medicare-eligible beneciaries health care benets,
including prescription drugs, through managed care health plans.
HealthSpring also operates a national stand-alone prescription drug
plan in accordance with Medicare PartD.
Commercial Medical
Cigna HealthCare provides a wide array of products and services to
meet the needs of employers, other sponsors of health benet plans
and their plan participants (i.e., employees/customers and their eligible
dependents), and individuals, including:
Network, Network Open Access and Open Access
Plus Plans
Cigna HealthCare oers a product line of indemnity managed care
benet plans on an insured (guaranteed cost or experience-rated)
or self-insured basis. Premiums for insurance policies written on a
guaranteed cost or experience-rated basis are reported in the appropriate
premium category in the revenue table included in the Health Care
section of the MD&A beginning on page45 of this Form10-K. For
self-insured plans, where a majority of the Company’s customers are
enrolled, revenues consist of administrative fees and are included in
fees in the revenue table.
ese plans use meaningful coinsurance dierences to encourage the use
of “in-network” versus “out-of-network” health care providers. ey also
encourage the use of and give customers the option to select a primary
care physician and use a national provider network, which is somewhat
smaller than the national network used with the preferred provider
(“PPO”) plan product line. e Network, Network Open Access,
and Open Access Plus In-Network products cover only those services
provided by Cigna HealthCare participating health care professionals
(“in-network”) and emergency services provided by non-participating
health care professionals (“out-of-network”). e Network point of
service (“POS”), Network POS Open Access and Open Access Plus
plans (“OAP”) cover health care services provided by participating,
and non-participating health care professionals, but the customers’
cost-sharing obligation is generally greater for out-of-network care.
Preferred Provider Plans
Cigna HealthCare also oers a PPO product line that features a national
network with even broader access than the Network and Open Access
Plans with a somewhat higher medical cost, no option to designate a
primary care physician, and in-network and out-of-network coverage
with greater member cost-sharing for out-of-network services. Like
Network and Open Access Plus Plans, the PPO product line is oered
on an insured (guaranteed cost or experience-rated) or self-insured
basis, with a majority of the customers being in self-insured plans.
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