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Ladies and gentlemen, thank you for standing by for Cigna's Third Quarter 2021 results review. At this time all callers are in a listen-only mode. We will conduct a question-and-answer session later during the conference and review procedures on how to enter queue to ask questions at that time. [Operator Instructions] As a reminder, ladies and gentlemen, this conference, including the Q&A session is being recorded. We'll begin by turning the conference over to Ms. Alexis Jones. Please go ahead, Ms. Jones.
Good morning, everyone, and thank you for joining today's call. I am Alexis Jones, Lead Principal for Investor Relations. With me on the line this morning are David Cordani, our President and Chief Executive Officer, and Brian Evanko, Cigna 's Chief Financial Officer. In our remarks today, David and Brian will cover a number of topics, including Cigna 's Third Quarter 2021 financial results, as well as an update on our financial outlook for 2021.
As noted in our earnings release when describing our financial results, Cigna uses certain financial measures, adjusted income from operations and adjusted revenues, which are not determined in accordance with accounting principles generally accepted in the US, otherwise known as GAAP.
A reconciliation of these measures to the most directly comparable GAAP measures, shareholders Net Income and total revenues respectively, is contained in today's earnings release, which is posted in the Investor Relations section of cigna.com. We use the term labeled adjusted income from operations and adjusted earnings per share on the same basis as our principal measures of financial performance.
In our remarks today, we will be making some forward-looking statements, including statements regarding our outlook for 2021 and future performance. These statements are subject to risk and uncertainties that could cause actual results to differ materially from our current expectations. A description of these risks and uncertainties is contained in the cautionary note to today's earnings release, and in our most recent reports filed with the SEC.
Before turning the call over to David, I will cover a few items pertaining to our financial results and disclosures. Regarding our results, in the third quarter, we recorded an after-tax special item benefit of $35 million or $0.10 per share for integration and transaction-related costs. As described in today's earnings release, special items are excluded from adjusted income from operations and adjusted revenues on our discussion of financial results.
Additionally, please note that when we make prospective comments regarding financial performance, including our full-year 2021 outlook, we will do so on a basis that includes the potential impact of future share repurchases and anticipated 2021 dividend s, and does not assume any impact from any business combinations or divestitures that may occur after today, such as our recently announced planned divestiture of Life, Accident, and Supplemental Benefits businesses outside of the U.S., which we expect to close in 2022. With that, I will turn the call over to David.
Thanks, Alexis. And thank you to everyone for joining us on our call today. This morning I'm going to spend a few minutes talking about our strong results for the quarter, how we are advancing our growth strategy, and I'll provide some additional perspective on our 2022 outlook, and then Brian will share some more details about our third quarter results and our outlook for the remainder of the year, and then we'll take your questions. Let's jump in. During the quarter we delivered adjusted revenue of $44 billion, and adjusted EPS of $5.73 per share, all while continuing to reinvest back in our business to fund growth, expansion, and ongoing innovation, and we continue to return significant value to our shareholders.
These results reinforce we are delivering for our customers, our patients, clients, provider partners, as well as for you, our shareholders. With our high performing health service portfolio and sharp focus on executing our strategy, we are confident in our ability to continue driving growth and are again raising our full-year 2001 guidance for adjusted EPS and revenue. Our performance is strong, considering the ongoing impact of the pandemic on medical costs, as well as the higher claims we've experienced amongst the special enrollment period or SCP customers within our individual business.
As it relates to our MCR in the quarter, our commercial business did improve from the second quarter to the third quarter, and our Medicare Advantage business also improved sequentially. We continue to execute a series of actions in 2021 and 2022 to further improve our MCR. And Brian will walk through this in more detail in a few moments. Separately in early October, we also announced an agreement with Chubb to sell our Life, Accident and Supplemental Benefits business in our international markets platform in 7 countries from $5.7 billion -- $5.75 billion. We expect to realize about $5.4 billion in net after-tax proceeds and to complete the transaction in 2022 following regulatory approvals.
Guided by our strategy and similar to our 2020 divestiture of our group insurance business, this transaction unlocks the value of the best-in-class leading asset, while also enabling us to even more sharply focus our business on health and well-being services. So overall, our performance for the quarter reflects our clear strategy and strong execution and delivering attractive results, and importantly, our ongoing commitment to prioritize and support the evolving health and well-being needs of those we serve. Now, I'll walk through some additional detail for our Evernorth and U.S. medical businesses.
A year-ago we launched Evernorth to tip the marketplace as our health service platform, focused on servicing health plans, employers, government organizations, and healthcare providers. Since that time, Evernorth has established itself with unique partnerships and innovative services that are resonating with multiple buyer groups. Our Evernorth pharmacy and our medical offerings through our U.S. medical platform are the 2 primary gateways through which most of our clients and customers form their base relationship with us.
Wrapping around these two exceptionally strong platforms are additional suites of Innovative Health Services through Evernorth, including benefits management, care solutions, and intelligent solutions. These help us to expand and deepen existing relationships. In the third quarter, Evernorth retained and expanded our relationship with the Department of Defense TRICARE pharmacy program, and renewed a 7-year contract. It's our privilege to serve almost 10 million active-duty service members, retirees, and their families.
Evernorth will continue supporting TRICARE pharmacy operations, including specialty pharmacy services, military pharmacy claims, and retail network pharmacies. The new contract also allows for expansion of specialty and care coordination services through 2029. As we look to the balance of the year and into 2022, Evernorth will continue to grow revenue and earnings. Turning to our U.S. Medical platform. In U.S. commercial, our teams are leveraging in deploying the innovative solutions from Evernorth to expand our service offerings and address the evolving needs of our clients and customers.
For example, in our U.S. commercial platform, we are leveraging Evernorth 's MDLIVE capabilities to expand virtual care options for our customers through their employers with primary, urgent, behavioral, and dermatology care. As part of these value-based arrangements during virtual visits, MDLIVE physicians are leveraging our Evernorth intelligence capabilities, enabling them to provide more connected and coordinated experience. And we continue to expand our capabilities with MDLIVE as we recently launched a virtual-first health plan for employers.
Another great example of Evernorth in U.S. commercial partnering to bring more value to our health plan clients is a new arrangement we have with University of Pittsburgh Medical Center Health Plan. We will make in-network care available to UPMC customers who live, work, or travel outside their network service area. UPMC has been an Evernorth pharmacy client for 16 years, and this agreement illustrates how we are collaborating across our enterprise to deliver greater affordability and differentiated value for health plan clients.
We are pleased how the market continues to recognize the value we are delivering through our broad suite of solutions, and as such, we continue to grow through both our U.S. commercial and Evernorth platforms. Within Medicare Advantage, consistent with our strategy, we continue to grow in our existing markets and are expanding into new geographies. Our progress is further supported by our overall value of our offerings. For the 2022 calendar year, 89% of our Medicare Advantage customers will be in 4-star or greater plans nationally.
This is the highest level we've ever achieved, and it marks the 5th year in a row we've improved our stars performance. And at our Individual and Family Plan business, we've driven strong growth in this year, increasing customers by 47% through the third quarter. A substantial portion of this growth did come from the extended special enrollment period. As I previously noted, some of the MCR impact in the third quarter was driven by the medical cost, amongst those we added during the outpaced SEP growth.
We do expect this will moderate in 2022. We are positioning ourselves to build on this momentum in the individual and family plan business by expanding our addressable markets again as we enter in 3 new states and 93 new counties in 2022. These new markets offer the potential to reach an additional 1.5 million customers. The continued strength of our results and the growth we're generating through the execution of our strategy gives us confidence we will deliver against our commitments in 2021.
We will deliver EPS in line with our long-term targets and revenue growth well above our long-term targets for yet another year. We will also deliver EPS within our long-term target range in 2022. Specifically, for 2021, we are committed to delivering our increased guidance for full-year adjusted EPS of at least $20.35. For full-year 2021, we remain on track for generating at least $7.5 billion of cash flow from operations and we expect to return more than $7 billion to shareholders in 2021 through dividends and share repurchase.
Looking to 2022, we expect to grow EPS by at least 10% off of our increased 2021 guidance of at least $20.35 per share. We anticipate a number of tailwinds, including core growth in our business and additional contributions from margin expansion in our U.S. Medical business as we drive pricing actions, execute affordability and efficiency initiatives and benefit from the return of Medicare risk adjustment revenue to more normalized levels. We're also expecting year-over-year headwind as we plan for net investment income to be more in line with historical levels.
And of course, the rate and pace of ongoing strategic investments will vary from year-to-year. In short, 2022 will be another strong year for Cigna. Now to briefly summarize, as we've demonstrated through the quarter, and throughout 2021, we are delivering for our customers, patients, clients, and provider partners as they experience the ongoing challenges of the pandemic.
We're also taking significant value enhancing actions, such as divesting a portion of our international business, returning substantial amounts of capital to our shareholders, and continuing to strategically invest in our capabilities and strategic partnerships. All of which position us to continue to advance our long-term growth agenda and continued to deliver shareholder value. With that, I will turn the call over to Brian.
Thanks, David. Good morning, everyone. Today, I will review key aspects of Cigna 's third quarter results, including the ongoing impact of COVID-19 on our business. And I will discuss our updated outlook for the full year. During the quarter, total medical costs were higher than our expectations within our U.S. Medical segment. Driven largely by the impact of the Delta variant in our U.S. commercial business and increased medical costs for special enrollment period customers in our U.S. individual business. Importantly, I would remind you that approximately 80% of our revenues are from service-based businesses that are not significantly exposed to medical cost fluctuations.
Our balanced portfolio and multiple levers for value creation resulted in Cigna 's overall revenue and earnings exceeding our third quarter expectations. This strong third-quarter performance, coupled with capital deployment activities, led to an increased outlook for full-year 2021, which I will discuss shortly. Now, turning to Enterprise results, key consolidated financial highlights in third quarter 2021 include adjusted revenue growth of 9% to $44.3 billion, adjusted earnings growth of 20% to $1.9 billion after tax, and adjusted earnings per share growth of 30% to $5.73.
Results in the third quarter reflects strong top and bottom-line growth with contributions across all of our businesses, with overall performance above our expectations. I will now discuss our segment level results, and will then provide an update on the details of our outlook, as well as our capital positioning. Regarding our segments, I'll first comment on Evernorth. Third quarter 2021 a adjusted revenues grew 13% to $33.6 billion. A adjusted pharmacy script volume increased 8% to 411 million scripts, and adjusted pretax earnings grew 7% to $1.5 billion compared to third quarter 2020.
Evernorth strong results in the quarter were driven by organic growth, including strong volumes in retail and specialty pharmacy, along with ongoing efforts to improve affordability for the benefit of our clients, customers, and patients. And deepening of existing relationships, partially offset by significant strategic investments to support ongoing growth, including our virtual care platform and technology capabilities.
Overall, Evernorth continues to create differentiated value for clients and customers, while driving overall revenue and earnings growth that exceeded our original expectations through the first 3 quarters of 2021. Turning to U.S. Medical. Third quarter adjusted revenues were $10.5 billion and adjusted pretax earnings were approximately $1 billion. Overall, our U.S. Medical earnings exceeded our expectations during the third quarter, reflecting the impact of favorable net investment income and increased specialty contributions, partially offset by higher claim costs due to the net impact of COVID-19, and increased medical costs for special enrollment period customers in our individual business.
The net effect of these claim cost impacts produced a medical care ratio of 84.4% in the third quarter. Looking ahead, we are actively managing overall medical costs and our MCR with the range of actions. Including continuing to leverage our insights from our strong data and analytics capabilities to address key drivers and identify opportunities such as guiding customers to more effective and efficient sites of care.
Continued discipline in our pricing and rate actions, and we're also continuing to promote preventative care and access to behavioral services to provide meaningful support to patients, and moderate overall medical costs over the longer term. Turning to membership, we ended the quarter with 17 million total medical customers, an increase of approximately 368,000 customers year-to-date. In U.S. Medical, the year-to-date customer growth was driven by net growth in select and middle markets within U.S. commercial and continued organic growth in Medicare Advantage and individual within U.S. government. In our international markets business, third quarter adjusted revenues were $1.6 billion and adjusted pretax earnings were $250 million.
These results were in line with our expectations. Corporate and other operations delivered a third quarter adjusted loss of $275 million. Overall, Cigna's broad portfolio of services continues to serve the needs of our customers and clients. Cigna remains committed to delivering value for all of our stakeholders, leveraging our well-positioned businesses. Now, turning to our updated outlook for full-year 2021. We are raising our adjusted earnings per share guidance for full-year 2021 to at least $20.35 per share, reflecting the strength of the quarter, the favorable impact of our year-to-date share repurchase, and acknowledgment of the ongoing fluidity of the broader environment.
This represents EPS growth of at least 10% from 2020, consistent with our long-term EPS growth range of 10% to 13%, even with the ongoing challenges associated with COVID-19 and while having significantly increased our dividend in 2021. As we look forward, it is clear that COVID-19 will continue to have an impact in the fourth quarter and in 2022. And as time progresses, COVID related impacts and the ongoing performance of the business are becoming more intertwined.
Therefore, we no longer believe it's instructive to continue to quantify the impact of COVID-19. These dynamics are fully contemplated in our 2021 expectation for adjusted EPS of at least $20.35 and our 2022 expectation for EPS growth of at least 10% off this 2021 guidance. Turning to revenue, we now expect full-year 2021 consolidated adjusted revenues of at least $172 billion, representing growth of at least 11% from 2020, when adjusting for the divestiture of our group disability in Life business.
I would note this revenue growth rate significantly exceeds our projected long-term average annual growth goal of 6% to 8% and represents the third consecutive year of significant revenue outperformance since our combination with Express Scripts in late 2018. I will now discuss our 2021 outlook for our segments. For Evernorth, we continue to expect full-year 2021 adjusted earnings of at least $5.8 billion representing growth of at least 8% over 2020, reflecting the significant value we create for our customers and clients.
For U.S. Medical, we continue to expect full-year 2021, adjusted earnings of at least $3.5 billion. Underlying this updated outlook, we now expect the 2021 medical care ratio to be in the range of 84% to 84.5%, which includes our expectations for elevated medical costs for individual special enrollment period customers. Regarding total medical customers, we continue to expect 2021 growth of at least 350,000 customers. Now, moving to our 2021 capital management position and outlook.
We expect our businesses to continue to drive strong cash flows and returns on capital even as we continue reinvesting to support long-term growth and innovation. For full-year 2021, we continue to expect at least $7.5 billion of cash flow from operations, reflecting the strong capital efficiency of our well-performing businesses. Year-to-date as of November 3rd 2021, we have repurchased 26.5 million shares for $6.3 billion. And we now expect full-year 2021 weighted average shares of approximately 342 million shares.
This includes the impact of the $2 billion accelerated share repurchase that we announced in the third quarter. On October 27th, we declared a $1 per share dividend payable on December 22nd to shareholders of record as of December 7th. Our balance sheet and cash flow outlook remains strong, benefiting from our highly efficient, service-based orientation that drives strategic flexibility, strong margins, and attractive returns on capital.
So now to recap, results in the third quarter reflects strong top and bottom-line growth with solid contributions across our businesses. Cigna has shown the ability to deliver value through dynamic environments with our breadth of businesses and multiple earnings levers. We continue to support our customers, clients, and coworkers, and deliver on our financial commitments.
We now expect 2021 full-year adjusted earnings of at least $20.35 per share, representing growth of at least 10% from 2020, consistent with our long-term EPS growth rate range of 10% to 13%, and we expect to grow 2022 adjusted EPS, at least 10% off our raised 2021 guidance. With that, we'll turn it over to the Operator for the Q&A portion of the call.
[Operator Instructions] Also, if you're using a speakerphone, please pick up your handset before pressing the buttons. Finally, we ask that you please limit yourself to 1 question to allow sufficient time for questions from those remaining in the queue. And one moment please, for the first question. Our first question comes from Mr. A.J. Rice with Credit Suisse. Your line is open. You may ask your question.
Thanks. Hello, everybody. Just maybe to try to drill down a little bit on that expectation for at least 10% growth of the new updated numbers for this year. I know it sounds like you're getting away from talking about that $250 of net COVID impact you're absorbing this year and others various inputs there, but I was wondering, because their last quarter it sounded like you were carrying a lot of your expectation for COVID related costs broadly defined into next year. As you think about your updated thoughts about '22, can you comment on how much of ongoing COVID headwind are you expecting and is there any other big changes to the puts and takes you'd laid out last quarter as you think about '22?
Hey A.J., good morning. It's David. Let me try to shape our insights relative to 2022, now that we're much deeper into 2021. First, you're right earlier this year, we've tried to frame the magnitude of the headwind and indisputably COVID had many disruptions to the marketplace, whether it's testing, treatment, revenue, dislocation, etc.
Against that backdrop, as you know, our broad service portfolio and a broad funding mechanism continued to perform quite well, and we're able to deliver from a marketplace standpoint. If you think about 2021, there's really four big chunky items. One was up pulling the headwind category. The headwind created by the COVID cost and the headwind created by MRA revenue decrement. And then, positives offsetting that somewhat which were favorable net investment income and some operating expense items.
Now as we think about and look at the 2022 environment, our visibility in terms of our growth outlook, our rate execution, our affordability initiatives, our efficiency initiatives, and our understanding of how this year is coming to close, broadly speaking, those puts and take in 2021 largely offset one another as we step into 2022, the headwinds and tailwinds. Our at least 10% growth in 2022 off of our elevated 2021 EPS, essentially represents capital deployment in line with our strategic target of 4% to 5% of accretion.
And the residual at least 5% to 6% from fundamental operating growth to get us to that at least 10%. To recap, additional visibility in terms of the drivers for 2022 growth -- mix of growth, rate execution affordability. And then secondly, the puts-and-takes in 2021 are configuring in a way that they've largely offset one and other as we step into 2022, underscoring that at least 10% is largely fundamental for our business portfolio.
Okay, great. Thanks a lot.
Thank you, Mr. Rice. Our next question comes from Ms. Lisa Gill with JP Morgan. Your line is open. You may ask your question.
Thanks very much, and good morning. David, I just wanted to better understand how you're thinking about the Ever-north business as we think about 2022? I know you've talked in the past about some of the business losses, but if you can give us an update as to how to think about Ever north going into 2022, and then as we think about the Ever-north business and think about the virtual primary care offerings that are out in the marketplace, what are you thinking with MDLIVE?
Good morning, Lisa. So relative to Ever north, first as we step into 2022, as Brian and I both noted, we're quite pleased with the underlying performance of Ever north. If you look at the inherent growth that ever north has delivered for the organization, and the diversity of the growth, we're quite pleased with that.
Secondly, our ability to both drive fundamental growth because you'd invest in innovation and extend our partnerships, we feel quite good. So just framing Ever north and then coming to the MDLIVE question, our Ever north portfolio has 4 specific portfolios of services that are positioned well: Evernorth pharmacy, Evernorth care, Evernorth Benefits, and Evernorth intelligence. Our positioning growth at the serving health plans, large employers, expanding with governmental agencies, and increasingly with healthcare providers continues to resonate well in the marketplace.
For 2022, to your comment relative to some losses, we expect to retention rate in the Evernorth pharmacy business in the mid-90s, which is still a strong result even with the known losses we'd identified. And given the strength we've had of growth over the last several years, we're quite committed to maintaining price discipline in the marketplace, so the business portfolio will grow yet again. Specific to MDLIVE, we're delighted to have the MDLIVE capabilities in our portfolio and that now resides within Evernorth care.
We see the utilization of those services continue to grow. As I noted, beyond important, urgent or Triage care. But two primary behavioral dermatology. And then we've recently expanded our virtual-first offering. So, we see it as a great opportunity to both expand access, improve affordability. But finally, it presents a platform to broaden some access to care in terms of alternative side of care capabilities. So, in a nutshell, we're pleased, we'll grow again and we're investing in further growth, including within the virtual capabilities of MDLIVE.
Great, thanks for the comments.
Thank you, Ms. Gill. Our next question comes from Mr. Justin Lake with Wolfe Research. You may ask your question.
Thanks. Good morning. I wanted to ask David about the international sale. First, in terms of multiple, it looks like you've got about 10 to 12 times kind of net income for that business. Is that correct? In the right ballpark? And then if so, just curious in terms of the strategic nature of the sale in terms of -- the multiple looks depressed relative to a business that's historically been looked at as a double-digit top-line grower. And then could you tell us how we should think about capital deployment once you get those funds? Is it going to be similar to what we saw with the Life and Disability, where there's a lot of share repo or should we think about something else? Thanks.
Sure. Good morning, Justin. Let me start and have Brian shape a little further both how we feel about the value realization here in the capital deployment. First, stepping back, we're quite proud of what has been built in our international portfolio over a long period of time. This specific portion of our international portfolio, so direct to individual life, accident and supplemental businesses, we've successfully grown over a long period of time. But using our strategy as a guide, the important underscore here, our strategy guides us to further enhance and deepen our health and well-being solutions.
This portion of our portfolio was less directly aligned over time to that. So, we use the strategy as a guide number 1. 2, we feel very good about the value realization, and the net value realization area is quite important in terms of a high-performing asset. And I appreciate your correlation to the group transaction, another high-performing asset where we felt quite good about using our strategy as a guide and capitalizing on a very attractive valuation.
And then finally, that strategic action is done to allow us to even further intensify our focus in the sub segments of the business that are more health and well-being oriented, both in the U.S. as well as globally from that standpoint as we'll continue to grow. I'll ask Brian to speak a little bit more towards how we look at the valuation and our capital deployment philosophy going forward.
Yeah, sure, David. And good morning, Justin. The math that you asked about in terms of the 10 times to 12 times multiple is in the right ballpark if you're looking at U.S. GAAP earnings contributions from the divested businesses, but very importantly, this is a case where economics and accounting don't necessarily square up. If you look at the discounted cash flows of the business here and the purchase price that we were able to get, it's quite an attractive deal economically that we're quite pleased with the financial terms for that reason, as you look at the timing of when dividends were available to be extracted, as an example.
In terms of deployment with the proceeds, the the broad template as, David made reference to of our group disability and life divestiture, is what we would expect to fall in this instance as well, with the exception of we don't have the same need for long-term debt repayment as we did with the group disability and life transactions. So, we would expect the primary use to be for share repurchase. And when we indicated in the press release that this would be neutral to slightly diluted to our 2022 EPS outlook. That's under the assumption that the primary use is for share repurchase.
Thank you, Mr. Lake. Our next question comes from Ms. Ricky Goldwasser with Morgan Stanley. You may ask your question.
Hey guys, this is Michael Hall on for Ricky. Thanks for the question. So, as it relates to 2022 commercial growth, a number of your peers have already mentioned expecting strong growth. They diffuse concerns around member attrition, and the dynamic, and emphasize share gains, I think one of your peers even mentioned '22 shaping up to be one of the strongest national account selling seasons in history. So, with that said, it's been a bright area, but also hard to imagine that everyone is winning contracts and gaining share. So, with that context, what are you guys seeing with the competitive landscape? And are you able to grow next year when everyone else comes in taking share?
Mike, good morning. It's David. Just a minute of backdrop relative to our performance in the commercial market and then I'll jump right into '22. We have a very focused strategy and a long track record over the last decade of successfully growing in the commercial marketplace. As we seek the sub-segment and deliver the right solutions for our respective clients in that marketplace. And if you think about it over the last decade - ish, we've generally grown low-single-digit medical membership. We couple that with significant and targeted cross-selling of our new and innovative services.
And then we complement that with appropriate pricing actions and the net of that yields higher single-digit revenue growth. So that's the big picture of our strategic approach. I'd also highlight with Evernorth, we are further expanding the services that we're able to bring through to deepen relationships, like our prior conversation relative to virtual care as an example. Now, specific to 2022, to be clear, we'll grow again. We will clearly grow our medical customer base again, and specifically, within the commercial market, we have good visibility in terms of having net growth in our national accounts in large account business portfolio, and we'll have another year of growth within our select segment.
So, the net of all that, in a marketplace that is competitive, as we are oriented around solutions that have affordability and high engagement programs with the right funding mechanisms, we will again have another year of net growth in the U.S. commercial portfolio, and it's something we're quite proud of and positioned to continue on.
Our next question comes from Mr. Kevin Fischbeck with Bank of America. You may ask your question.
Great. Thanks. It sounds like in the quarter you mentioned, you've benefited from investment income and specialty outperformance. I guess, two things. So, do you believe that the specialty outperformance is something that is going to be sustainable? And then if you could just talk a little bit more about the competitive landscape for commercial pricing for next year, do you think that you're going to be within your target range? Or I guess maybe where your target range is expected to be in the commercial business for next year.
Good morning, Kevin, it's Brian. I'll start on the first piece of your question. I think this was in the context of our U.S. Medical performance in terms of your question on specialty. So, as you reflect on our third quarter performance for that segment, again, the earnings in totality were above our expectations in the quarter. We had two areas of favorability, as you called out, investment income, and specialty contributions. And your specialty contributions includes pharmacy, behavioral, dental, the full suite of portfolio capabilities we have in the specialty domain.
That was partly offset by the two sources of claims pressure that I articulated in the COVID related pressure in commercial as well as the special enrollment period. MCR is now in elevated in the Individual exchange. Specifically on the favorability that we recorded in the third quarter. The investment income is non-recurring, so you should not consider that to be something that would occur again in the fourth quarter or '22.
We would expect the specialty contributions to persist as favorability as we head into fourth quarter and into '22. That was a smaller component of the 2 in terms of the favorable items in the third quarter, but that is something we would expect to continue to persist going forward. David maybe will comment on the pricing environment for commercial.
Sure. Good morning, Kevin. Relative to the pricing environment for commercial, and I'm going to maybe sneak in a little bit on the individual marketplace here as well. But specifically, that market has continued to be a competitive market, and it remains that meaning the commercial marketplace, more broadly, the employer commercial market. And with that as a backdrop into my prior answer, we will grow our commercial book of business and we will improve our MCR. Our visibility has us both growing and improving our MCR within the commercial book of business.
So, to do that, we will be quite disciplined, Kevin, to be clear, and we're willing to make targeted trade-offs for MCR or margin versus volume. And the net of that will yield net customer growth and net margin improvement as we step into 2022. An add-on specifically in the individual market -- our visibility in the individual market is that there are significant pockets of competitiveness in certain markets. And as such in the Individual marketplace, we would expect for 2022 to see no growth or more likely negative growth, some shrinkage in our book of business, but improvement in the MCR within that portfolio. And that's fully contemplated in our 2022 outlook of net growth for the portfolio, as well as earnings expansion.
Thank you, Mr. Fischbeck. Our next question comes from Mr. Gary Taylor with Cowen. You may ask your question.
Hi, good morning. Just wanted to go back to the MCR comments and appreciate what you just said, David, but just wanted to think a little bit more about 2021 so far. So, as we kind of look at the potential impact of special enrollment period enrollees based on your typical attrition. It doesn't look like that's particularly material to the increase in MCR versus 2019 baseline, which is up about 400 basis points in the 3Q when you had a lot of COVID costs, but it was up almost 400 basis points in the 2Q when you didn't have a lot of COVID costs and you had more deferred care coming back.
So, I guess the question is, is there any other substantial moving parts to how you're running versus the 2019 baseline, and then just going forward, what are your -- what do you anticipate as COVID and the Delta variant comes down? Do you feel like commercial utilization is largely caught up or we're sort of still back in a cycle, like you were in the 2Q where you see some of the deferred care increasing?
Morning, Gary. It's Brian. So, I'll try to take the various components of that question here. So, as you think about where we are running in 2021 on the MCR, maybe I'll talk in terms of the full-year guide. I think that that's probably the most constructive way to pull it apart. the 84% to 84.5% refresh guidance that we issued. If the special enrollment period lives within the individual exchange portfolio had not grown to the level that they are, and had not had the elevated MCR that they did in the quarter, we would've had an MCR performance for the full-year that was more like the higher end of our prior guidance range, so towards the higher end of the 83% to 84% range, if you exclude the impact of the Individual SCP customers from the full-year outlook.
So just to give you a little bit of dimensioning as to the materiality there. Those customer lives have built up over the course of the year, so there were not that many in the second quarter, there were many more in the third quarter. And the elevated MCR hit us, particularly, significantly in the third quarter and we expect that pressure to continue into the fourth quarter. As David did reference to in a prior question, we would expect that to dissipate into 2022 as many of those lives attrit into our choose new carriers.
As it relates to other parts of the portfolio. The commercial business in the third quarter, we had some elevated COVID related costs, particularly in August and September, with the Delta variant hitting younger ages more significantly than earlier in the pandemic. So that created some elevated commercial claim cost pressure in the third quarter. I would note in our Medicare Advantage book, the MCR in the quarter was a little bit favorable to our expectations, which gives us greater confidence here as we head into 2022 on that subset of the overall U.S. Medical book of business.
Hopefully it gives you a little bit of a picture for how 2021 is shaping up. In terms of your question, looking forward on commercial utilization, are we caught up, etc. we have seen much less deferred care in the commercial line of business throughout the pandemic, and all the indicators that we track, whether that be preventive care utilization or whether that be rates of new cancer diagnoses, etc. I would tell you that there's not a significant amount of future pent-up demand or catch-up care to come. With that said, our pricing posture, as David mentioned earlier continues to be a prioritization of margin expansion as we head into 2022.
Thank you. Appreciate it.
Thank you, Mr. Taylor. And next question comes from Mr. Ralph Giacobbe with Citi. You may ask your question.
Thanks. Good morning. I guess I want to go back -- you guys specifically called out the increased specialty contributions, and obviously that's always been part of the story. So hoping you can give more details there, what the specific drivers are there, and anything to call out. And then maybe within that, I was hoping you could talk about the stop loss product. I would have imagined that just given higher commercial trend that maybe more of that is being triggered and maybe some underperformance there. But we just like to get your commentary on how that's performed and how we should think about that for 2022 from a re-pricing perspective. Thanks.
Morning, Ralph, it's David. Just a couple of minutes on the shaping and I'll hand it over to Brian. As you articulate the specialty components, so we look at that broadly back to our strategy. Our strategy has been and continues to be how do we wrap the right suite of solutions, employer by employer, to help to get the overall health and wellbeing offering aligned in the overall affordability line. And historically, one thinks about a specialty suite of a few products of behavioral pharmacy, Dental has expanded tremendously to 25, 30 different services when you take the subsegments of decision, support, chronic care management, specialty services, now virtual alternative services, etc.
My point of underscoring this has been as you articulated and continues to be a really important part of our strategy to try to get the right value to be realized for our for our clients, our customers, and our patients. And as I noted, our Evernorth service capabilities continue to grow, which add to the portfolio of services to be levered there. I will ask Brian to talk a little bit more in terms of the drivers.
Sure, David. Good morning, Ralph. So in terms of the specialty contributions we called out they're the couple of areas I'd particularly point to as more material within our self-funded business, we had some strength in pharmacy in particular, and as I mentioned earlier, to a prior question, we would expect that to persist as we head into 2022. We also saw some upside within our behavioral health offerings as demand for that has continued to grow throughout the pandemic. So we saw some increased uptake there, which drove some additional margin for us within the quarter.
And again, those are two areas we would expect to persist as we head into the new year. Relative to stop loss, obviously you gotta pull this one apart further because you got Individual stop loss cover as well as aggregate stop loss cover, and the dynamics there behaved a little bit differently throughout the pandemic, meaning most COVID related claimants didn't actually hit our Individual stop-loss thresholds. Yet we saw a little bit of pressure earlier in the pandemic on our aggregate stop loss business.
That business gets repriced along with our typical 12-month contract cycles for all the clients that we have. So we feel good about how we positioned there on a prospective basis. I'd also note we're seeing good demand for that product. You probably saw on the supplement there, we had 7% premium growth on our stop loss line in the quarter-over-quarter. So, feeling good about all the specialty solutions when you look at the total portfolio.
Great. Thank you.
Thank you, Mr. Giacobbe. Our next question comes from Mr. Josh Raskin with Nephron Research. You may ask your question.
Hi, thanks. Good morning. Appreciate you guys taking the question. So the MLR, I know you guys, only disclose one sort of big MLR for the U.S. Medical segments. I was wondering if you could break out or give a little bit more color even if it just directional on the MLR 's for sort of commercial and then, government and maybe, even within government, how much was from the IFP versus Medicare Advantage? And then just a quick follow-up on stop-loss, what are the attachment points at the individual claim level typically? I know there's a range of those, but kind of maybe what's the most common thresholds than an individual has to hit?
Good morning, Josh. So I'll try not to be too redundant with some of my prior comments, but just to kind of summarize a few important points here as you pull apart the MLR for the full year, as I mentioned earlier, the refresh 84% to 84.5% outlook reflects particular pressure from the Individual exchange lives and specifically the special enrollment period enrollees. So removing that, we would have been toward the higher end of our prior guide of 83% to 84%, but a sub bullet there is the individual open enrollment lives are actually performing pretty well.
So when we look at the profitability of the overall individual portfolio, we have good performance on the standard open enrollment lives. We have poor performance on the special enrollment period lives and the total picture there is therefore a bit elevated. Medicare Advantage as I made reference to actually ran a little bit favorable to our expectations in the third quarter. And then commercial was a touch higher than our projections due to the effect of the Delta variant in the months of August and September in particular.
So those are the broad buckets that I paint for you, do you think about what's inside the medical care ratio. Relative to stop loss, we do have a range of attachment points depending on the client. So we tend to see particular popularity around the $15,000 to $75,000 level, but it really depends on the risk appetite for a given client. So it's hard to say that there's one that's always the preferred choice. We have a distribution and the distribution evolves depending on the appetite for clients at any given point in time.
Perfect. Thanks.
Thank you, Mr. Raskin. Our next question comes from Mr. Kevin Caliendo with UBS. You may ask your question.
Hi, this is James Stewart on for Kevin. Just maybe with the sale of Chubb, you're signaling more of a focus to core healthcare business. Are there any other segments within the Company that you consider a non-core that you might be looking to dispose off in the future?
Good morning. It's David. As you noted, the action we took relative to that part of our portfolio and previously the action we took relative to our group insurance business, we deem to be a good fiduciary management of the portfolio and looking at the strategy as a guide to our actions, headline is I would not signal anything of materiality that sits on the horizon. I would reinforce, it's a dynamic process. Our responsibility is to dynamically manage that. But I would not signal anything on the horizon. I'm quite proud of the organization and pleased with the successful execution of both transactions: one completed, second under regulatory review right now.
Thank you. Our next question comes from Mr. Steve Valiquette with Barclays. You may ask your question.
Thanks. Good morning, everybody. Just a question that maybe tie as a lot of the other discussion points together. For the preliminary view of '22, I know it's early, but just thinking about the framework of '22 relative to some of your long-term targets that you laid out the analyst meeting. I'm curious -- so for U.S. Medical, you just talked about growth next year, but the long-term guidance range is 8% to 11% earnings growth in that segment, 4% to 6% for Evernorth, and the rest from capital deployment.
But should we think about -- is that still the usable framework going into '22, or should we think about maybe less operational growth, and maybe more from capital deployment. Just any additional thoughts around those components might help knowing that its preliminary right now.
Sure. Good morning, it's David. Big picture as you look to 2022, brief reference to this previously, but our view of the earnings visibility and the growth visibility relative to 2022 essentially, if you take the -- at least 10%, we underscore that with capital contribution to our EPS growth in line with our strategic target, which is 4 to 5. Then if you back away from that, that leaves you 5 to 6 fundamental organic earnings growth contribution to get to the at least 10% number. And we think that's an appropriate and prudent and attractive outlook given the fluidity and dynamism of the marketplace.
Broadly speaking, both components are in line with our long-term strategic objectives and we have a track record including 2021, which is a disrupted year of delivering in line with that. Good fundamentals, a little more than 50% of it being organic, a little less than 50% of it being capital deployment, and very much in line with our long-term strategic targets.
Got it. Okay, thanks.
Thank you, Mr. Valiquette. Our next question comes from Mr. Matthew Borsch with BMO Capital Markets. You may ask your question.
Yes. Thank you. Just wanted to ask what you're seeing in terms of customer preferences and actions in the middle market, particular degree of interest in alternate ASO type funding for the products versus what you've seen over the last few years. And then maybe in the stop loss market associated with that. Am I correct that some of the other carriers may be correcting for what was perhaps overly aggressive pricing in earlier years, which is maybe giving you a little bit of a tailwind there on your own growth?
Matthew, good morning, It's David. So you referenced middle market. I don't think there's a singular common definition middle markets, so let me try to frame your important comment. First, as you look at our go-to market offerings, we have a broad suite of funding alternatives and we seek to offer to our clients their respective decision of how they want to finance the purchase after the benefits are configured, after the access profile is configured, after the clinical programs are configured, and the service models are configured to align as Brian referenced before, the risk transfer in the balance relative to them, so having that broad suite is really important.
If we look at the select segment, 100 to 500 live clients, it varies from year-to-year in terms of how much of the client demand is guaranteed cost versus self-funded with stop-loss, but self-funded with stop-loss has been a meaningful portion. And as you walk from that into the heart of what I might consider middle-market, the further you walk up an average size, on average, more demand for self-funded, less demand for risk transfer. And in the in between range, some for shared returns of a fundamentals that exist.
So a little bit of linearity as you just go off in respect to size from that standpoint, but the important part is choice that we offer in the marketplace and try to separate the financing decisions. from the design features from the program. I would say to the last part of your question, I do not believe that there's a boomerang or reconfiguration effect that happened that we've benefited from a stop-loss standpoint. We've seen just consistency in how we use stop loss.
And I'm remind ed from prior conversations, we have a large book, we have a dedicated team that manages that book because it needs to be specialization in that like many other aspects of our business. And it's both performed for clients, importantly, giving them the peace of mind and revenue predictability and expense predictability they need, as well as for us over a long period of time. But I would not call out anything unique in terms of ebbing and flowing that's changed our rate of growth in stop loss over the recent past.
Thank you.
Thank you, Mr. Borsch. Our next question comes from Mr. George Hill with Deutsche Bank. You may ask your question.
Good morning, guys, and thanks for taking the questions. David and Brian, just a couple of being counting ones and a quick question. David, I just want to make sure that 2035 or whatever the number is post Q4 is the right jumping off point for the 10% or better growth in 2022, given it sounds like you're saying all the other pushes and pulls are on mute now, can you quantify PBM to commercial medical cross-sales this selling season? And I'll pause right there.
So George Hill it's two questions I heard. Question 1, yes. The at least $20.35, which is our raised EPS is the appropriate jump off to attach the at least 10% growth. We're pleased to have that underlying strength in that clarity of message. The second question, I think you're asking relative to PBM, commercial cross-sell penetration, etc. In respective growth, I don't have an Individual number for you. We have not historically walk-through individual numbers there. I'd ask you to step back and remember our strategy here. We have a high cross-sell and high integrated offering within our medical business.
As you think within the prior question that Matthew asked, as you go to our select segment, think about that as 100% integrated. It is so integral to our offering, and as you move upmarket, it's more of a standalone sale that needs to be made. We see continued progress there, and we're pleased to either have it as an integrated part of our medical offering or a standalone PBM offering that we could harness and sell additional services because at the end of the day, as I called up my prepared remarks, there were 2 fundamental ways in which a client or customer establishes their primary health and wellbeing relationship.
Either a pharmacy relationship or largely off of a medical relationship. and we're positioned to lever both. So I would leave you with a directional answer on the PBM commercial. Brian referenced PBM strength over pharmacy strength in our commercial portfolio. That's a net positive. And we continue to see on traction both on standalone pharmacy as well as integrated pharmacy within our business.
Thank you.
Thank you, Mr. Hill. Our next question comes from Stephen Baxter with Wells Fargo. You may ask your question.
Hi, thanks. Just wanted to come back to the individual market commentary you made. Appreciate that you're pricing, I guess conservatively in a fairly competitive backdrop. How much of the way back towards your target margins do you think that's going to get you in 2022? And then how should we think about growth beyond 2022 as you previously have talked about, doubling this market through 2025? Thanks.
Good morning, Stephen. We were seeking to be quite clear in terms of -- there's argue -- indisputably, there's some pockets of intense competitive pricing in the IFP marketplace or the Individual exchange marketplace as it's probably articulated. Given the breadth of our portfolio, we're going to be able to achieve both our aggregate growth as well as our aggregate earnings objectives, while maintaining price discipline in temporarily dislocated markets, and we deem that to be 1.
So we expect to see a net flat or decrement in our volumes in the Individual exchange business and a margin improvement. I'm not going to give you a margin number. We're not guiding in detail for 2022 yet and we typically don't guide relative to individual margins. Having said that, we expect to improve that margin from 2021 to 2022, to a more attractive and more sustainable level and we'll maintain the discipline there.
As it relates to intermediate to long term, we continue to see this as a growth market. But as we've managed it and if we demonstrate it over time, if there were temporary dislocations, we'll maintain discipline, and will lever other parts of the business to ensure the portfolio delivers. And as I noted in my prepared remarks, we've entered 3 more states and almost 100 additional counties, to give us access to an addressable market of approximately 1.5 million additional customers to sell to.
And we've been in this marketplace since its inception in 2014. And we have a track record of sustained performance, albeit episodically needing to sharpen focus as we will in 2022, given the market conditions.
Thank you, Mr. Baxter. Our next question comes from David Windley with Jefferies. You may ask your question.
Hi, thanks for taking my questions. David, I'm interested in your views, albeit early, on this Build Back Better bill that appears to be moving toward a vote, and maybe specifically, what you think the impact of government negotiation on a top 10 or 20 drugs beyond our exclusivity would have on your PBM business?
Good morning, Dave. So clearly a lot of fluidity right now on the health and we've operated for a long period of time in an environment and we'll continue to that has an active both legislative and regulatory agenda. So we understand that fully. Big picture stepping back, any initiatives that are constructive and sustainable, that improve affordability and value for individuals, we're actively open to engaged in and generally supportive of.
Specifically in the pharmacy space where you double-click down on. We think the most meaningful way to test sustainable policies -- policy change that could further affordability is to stimulate and further accelerate more competition. And if a heart come back as an example to make it tangible, hepatitis C was, I think, a very positive example that reinforces that. But as the marketplace rapidly move from 1 to 2 suppliers for hepatitis C services, which was a breakthrough drug that society benefits from, the overall affordability changed dramatically.
That's an action that is different than who's negotiating or it's very different than putting in artificial cap on a rate of growth from that standpoint. Big picture, we will await specific details and we will remain actively engaged, no doubt. We believe the most sustainable way to further improve affordability, is to expand choice and expand competition.
That's what's worked in the marketplace in the model. And lastly, per prior conversation we've had our well-performing and broad portfolio pharmacy services and tools is well-positioned to be able to deliver value in a changing environment, and we're confident in the capabilities we have over the strategic horizon here.
Great, thanks for your thoughts.
Thank you, Mr. Windley. Our last question comes from Lance Wilkes with Bernstein. You may ask your question.
Could you just give a little more color on Evernorth pharmacy and what I was particularly interested in is, from a vaccine standpoint in the quarter, how much of that impact volumes and margin? And then are you seeing much impact to margin from specialty pharmacy going generic, whether that's the beginning or your outlook for that? Thanks.
Good morning, Lance. It's Brian. So within the third quarter in Evernorth, we fulfilled about 4 million COVID vaccine prescriptions. So to put that into context, that's about 1% of our total script volume, and year-to-date, we're up to about 16 million across the three quarters here in 2021. So again, roughly about 1% of total script volumes for Evernorth, but not a material contribution from an income standpoint.
And if that number goes up or down next year, it won't materially move the needle for the Evernorth segment. More broadly on the second part of your question, as we think about specialty generics, and you can even broaden that to include biosimilars. We're really excited about those for the future from the standpoint of driving affordability on behalf of our clients and customers. We think competition is a good thing and ultimately, Specialty Generics.
While the timing with which they're introduced is hard to predict and does create some variability in our quarterly income patterns. Ultimately, we view that as a great thing for our clients, customers, and ultimately for our business. And fortunately, we have a wide range of earnings levers that allow us to capture value in a variety of ways depending on how different client contracts are constructed. We're really excited about especially generics and biosimilars going forward.
Great. Thanks.
Thank you, Mr. Wilkes. I will now turn the call back over to David Cordani for closing remarks.
Just to briefly wrap up our call. I do want to underscore how proud and appreciative I am of our more than 70,000 co-workers around the globe who continue to be dedicated to the many stakeholders we serve. Our team is working to support our patients, our clients, our customers, our partners, in this very fluid and ongoing challenging environment.
And the team is -- continue to step-up time and time again to make sure we're providing the level of support, again for our clients, our customers, our patients, as well as our communities. And through it all as an enterprise, we remain focused on executing our strategy guided by our framework of delivering value every day, partnering and innovating to expand, and then expanding our addressable markets to broaden our reach. We thank you for your engagement today. We look forward to providing future updates on our success going forward, and ask you to enjoy the rest of your day. Thanks.
Ladies and gentlemen, this concludes Cigna 's third quarter 2021 results review. Cigna Investor Relations will be available to respond to additional questions shortly. A recording of this conference will be available for 10 business days following this call. You may access the recorded conference by dialing 866-359-6499 or 203-369-0156. There is no pass code required for this replay. Thank you for participating. We will now disconnect.