Cigna Group

Cigna Healthcare Segment

Cigna Healthcare includes the U.S. Healthcare and International Health businesses, which provide comprehensive medical and coordinated solutions to clients and customers. As described in the introduction to Segment Reporting, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations. Key factors affecting results for this segment include:

•customer growth;

•revenue growth;

•percentage of Medicare Advantage customers in plans eligible for quality bonus payments;

•medical costs as a percentage of premiums (medical care ratio or "MCR") for our insured businesses; and

•selling, general and administrative expenses as a percentage of adjusted revenues (adjusted expense ratio).

In January 2024, we entered into a definitive agreement to sell the Medicare Advantage, Medicare Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits and CareAllies businesses within the U.S. Healthcare operating segment to HCSC, subject to applicable regulatory approvals and other customary closing conditions. See Note 5 to the Consolidated Financial Statements for further information.

Adjusted revenues increased 3% and 4%, primarily reflecting higher premium rates due to expected increases in underlying medical costs, partially offset by business mix.

Pre-tax adjusted income from operations increased 3% and 11%, primarily due to a lower adjusted expense ratio and higher net investment income. The improvement for the three months ended June 30, 2024 was partially offset by a higher medical care ratio.

The medical care ratio increased 110 bps for the three months ended June 30, 2024, primarily due to a higher U.S. Healthcare medical care ratio reflecting business mix and unfavorable revenue adjustments related to prior years, partially offset by effective pricing execution and affordability initiatives.

Theadjusted expense ratio decreased 90 bps in both periods, primarily due to revenue growth outpacing volume-related expenses as well as ongoing efficiencies and disciplined expense management.

Medical Customers

A medical customer is defined as a person meeting any one of the following criteria:

•is covered under a medical insurance policy, managed care arrangement or administrative services agreement issued by us;

•has access to our provider network for covered services under their medical plan; or

•has medical claims that are administered by us.

(1)International Health excludes medical customers served by less than 100% owned subsidiaries, as well as certain customers served by our third-party administrator.

Total medical customers decreased 2%, primarily due to a decrease in Individual and Family Plans customers.

See Part I, Item 1 of our 2023 Form 10-K for definitions of Cigna Healthcare's market segments. During the fourth quarter of 2023, the U.S. Commercial and U.S. Government operating segments merged to form the U.S. Healthcare operating segment. Medical Customer information presented as of June 30, 2023 has been restated to conform to the new operating segment presentation.

Unpaid Claims and Claim Expenses

Our unpaid claims and claim expenses liability increased 2%, driven by stop loss seasonality, partially offset by a decrease in Individual and Family Plans customers.