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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, thank you for standing by for Cigna's Fourth Quarter 2017 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 the 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 Mr. Will McDowell. Please go ahead, Mr. McDowell.
Good morning, everyone, and thank you for joining today's call. I am Will McDowell, Vice President of Investor Relations. Joining me this morning are David Cordani, our President and Chief Executive Officer, and Eric Palmer, Cigna's Chief Financial Officer. In our remarks today, David and Eric will cover a number of topics, including Cigna's full year 2017 financial results as well as our financial outlook for 2018.
As noted in our earnings release, when describing our financial results, Cigna uses certain financial measures which are not determined in accordance with accounting principles generally accepted in the United States, otherwise known as GAAP.
Specifically, we use the term labeled adjusted income from operations and earnings per share on the same basis as our principal measures of financial performance. A reconciliation of these measures to the most directly comparable GAAP measure, shareholders net income, is contained in today's earnings release, which is posted in the Investor Relations section of cigna.com.
In our remarks today, we will be making some forward-looking statements, including statements regarding our outlook for 2018 and future performance. These statements are subject to risks 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 in 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, I note that in the fourth quarter, we recorded special item charges to shareholders net income totaling $221 million, or $0.88 per share, primarily to reflect the impact of the recently passed U.S. tax reform legislation. Specifically, this fourth quarter charge was related to the revaluation of the company’s deferred tax assets and liabilities at the new statutory rate and a one-time tax on overseas earnings.
As described in today's earnings release, special items are excluded from adjusted income from operations in our discussion of financial results. Lastly, and as previously disclosed effective January 1, 2018 Cigna will adopt a new accounting standard titled revenue from contracts with customers or ASU 2014-09 which addresses recognition of revenues under GAAP. Cigna will adopt this accounting change on a retrospective basis in the first quarter of 2018 and will recast prior periods.
This accounting change requires reclassifications that impact certain financial ratios, but importantly have no impact on the fundamentals of the business and no impact to earnings or cash flows.
Because this accounting change is effective January 1, 2018 the impact of the new standard is not reflected in our 2017 results that David and Eric will discuss in a few moments. However, when David and Eric will provide commentary on our 2018 outlook, it will be on a basis that assumes retrospective adoption of this accounting change with both 2018 and 2017 discussed on the basis of the new standard.
To assist analysts in modeling the impact of this accounting change, we have included a supplemental schedule of financial information on page 17 of our quarterly financial settlement which shows the impact to our financial statements and ratios for the years ended December 31, 2017 and 2016.
Finally, consistent with past practices, when we make any prospective comments on earnings or EPS outlook, we will do so on a basis that excludes the impact of any future capital deployment or prior year development of medical costs.
And with that, I will turn the call over to David.
Thanks Will. Good morning everyone and thank you for joining our call today. I’ll begin my comments by reviewing the highlights of our 2017 financial results, which reflect exceptionally strong performance across our portfolio of businesses.
Our sustained, differentiated results were driven by the effective execution of our go-strategy, along with the ongoing contributions of our talented and focused team to always put our customers at the center of all we do.
I will also highlight how we are continuing to deliver differentiated value and growth in our U.S. commercial employer market where we see effectively consultatively [ph] engage in customized solutions that improve our clients business and the quality of life for our customers.
I’ll then offer initial insight into our expectations for 2018 which includes sustained momentum across our businesses and a strong capital position, driven by the organic results we deliver as well as enhanced impact from recently passed tax legislation.
Eric will then address our fourth-quarter and full-year 2017 results in more detail and will provide the specifics for our outlook for 2018 before we take your questions and then I’ll call a Q&A with some wrap up comments.
Let’s dive in with some highlights from our share. Our results include strong performance across each of our priority growth platforms. Commercial employer, U.S. seniors, Global Supplemental Benefits and Group Disability & Life led by delivery of continued industry-leading medical cost trend.
For 2017, our full year consolidated revenue increased by 5% to $41.6 billion. We reported full year adjusted income from operations of $2.7 billion or $10.46 per share representing a per-share increase of 29% with each of our business segments delivering strong growth over 2016.
In addition, in 2017 Cigna grew to serve more than 95 million customer relationships worldwide all while continuing to generate strong margins and significant free cash flow for the benefit of our shareholders. Overall, we delivered very strong result in 2017 and as I’ll discuss in more detail we are positioned to once again deliver competitively attractive revenue and earnings growth in 2018.
Now I’ll spend the next few minutes delving further into our U.S. commercial employer business. We continue to view the employer marketplace as a very attractive growth opportunity. In a highly dynamic and disruptive environment, we continue to create value for employers by pursuing the right balance of affordability and personalization through a greater emphasis on alignment, transparency, and being the undisputed partner of choice.
We improve our client’s business by helping to ensure they have healthy, present and engaged employees all on a more affordable and predictable basis. We achieved this in three key ways; first, through a strategic orientation and focus on alignment and engagement, which helps our employer clients better manage costs, and leverage integration to improve health and productivity all in a personalized fashion. This approach enables us to drive growth across our U.S. portfolio of businesses including significant opportunities to continue to add new clients in the Select and Middle Market segments and on a targeted basis with international account segment.
Second, we continue to retain, develop and attract the best talent around the world, which enables us to operate with a high touch consultative service orientation for the benefits of our customers and clients.
As we simplify many of the complexities in healthcare ecosystem, such as making it easier for our customers to connect to the right doctors, coaches and clinicians and take the customize employee benefit programs.
And third, our ongoing investments with our commercial employer business to further enhance affordability and personalization is in large part driven by effective, ongoing integration.
Growth of the integration Cigna’s approach differs considerably from traditional cross selling which simply combines multiple products into one sale and it differs from bundling, which improves only the pricing structure of a sale. Rather Cigna’s integrated model goes beyond, meaning we use combined data across our solutions to develop insights that drive improved health outcomes.
For example, our behavioural and medical teams work closely to identify Cigna customers with conditions which frequently lead to co morbidities in the behavioural realm, such as depression, positioning all behavioural colleagues to intervene on a preventative basis.
In addition, we continue to embed lifestyle coaching into our medical programs. This approach helps our customers achieve their specific health goals such as smoking cessation, achieving a healthier weight for better and more effectively managing their chronic conditions.
Pharmacy integration is another key driver for us to help improve overall health and affordability. Our integrated approach provides us with additional customer touch points to help ensure individuals who are taking their medication and to drive increase health engagement in specialty condition management, case management and health coaching.
In addition our specialty pharmacy capability drives significant opportunities to improve affordability for the most complex cases, because our integrated model manages both the pharmacy and medical side of the cost.
I would [Indiscernible] approach here help this drive the lowest medical cost trend in the industry again in 2017. Going forward, we will continue to define industry-leading integration by bringing innovative and new approaches to the market. For example, our initiative to reduce the use of opioids has pharmacy, behavioural as well as medical components, including close collaboration with our network partners to improve prescribing patterns.
Our approach to integration in addition to helping to drive clinical outcomes and affordability also helps to further improve the overall customer experience. An additional example of our ongoing investments in innovation is our recent acquisition of Brighter, one of healthcare’s most innovative technology companies.
Brighter engages customers and healthcare providers to more effectively and efficiently deliver high-value healthcare in a personalized and seamless way. This acquisition further accelerates our ability to develop new digital platforms as well as to further innovate new end-to-end experiences that connect individuals and healthcare providers with the guidance, support and incentive they need to further improve affordability and personalization.
Taken together, our broad and diverse capabilities integrated solutions and customer centric approach have consistently fueled our ability to deliver best-in-class medical cost trend for many years running.
To illustrate the importance of the impact of medical trend, I’ll provide a specific employer example. A 1000 life employer working with Cigna would have experienced nearly $2 million in medical cost savings over the last five years, relative to the industry average medical cost trend of 67%, thereby providing opportunities for them to strengthen their business in this highly competitive environment, whether through further investments in innovation, expansion of the workforce or margin growth, and with approximately 85% of our U.S. commercial customers being serviced through transparent ASO funding arrangements, Cigna’s medical cost trend results directly benefit our employer clients, their employees and families.
Now looking ahead to overall expectation for 2018, we will continue creating strong value for our customers, clients and as a result for our shareholders through our consistent focus on delivering affordability personalization as well as partnering with healthcare professionals to ensure our customers receive the highest quality healthcare.
We expect to deliver revenue growth in line with our long-term objective of high single digit annual growth. Our outlook anticipates a 19% to 23% EPS growth rate over 2017 and I would note consistent to our practices, our EPS outlook does not include the impact of prior year reserve development or any future capital deployment in 2018.
Regarding recent U.S. tax reform, we anticipate positive earnings impact in 2018 inclusive of further investments in three critical areas, furthering our capabilities relative to innovation for the benefit of our customers, client and healthcare professional partners, furthering investments in market-based initiatives benefiting our external stakeholders including our communities and further investments in our Cigna colleagues.
Overall for 2018, we expect continued strong financial health and free cash flow inclusive of these investments. Now stepping back, at our investor day in June of 2017, we introduced an attractive EPS target of $16 per share for 2021. Each of our four growth platforms have remained well positioned for sustained growth. We have momentum from our 2017 performance expect to deliver another strong result in 2018 augmented by the U.S. tax reform.
In addition to this strong positioning we are further aided by our tremendous ongoing capital position. As a result, today, we are pleased to increase our long-term EPS target from $16 per share to $18 per share for 2021.
As I turn the call over to Eric, I want to recognize what our talented team of approximately 45,000 colleagues around the globe are positioned to achieve in 2018. As a team, we are poised to continue driving attractive growth and significant value creation for our customers, clients as well as our shareholders.
As a team, we remain driven by our unwavering mission of helping to improve the health, well-being in sense of security of those we serve around the world, and our innovative approach to meeting the needs of our customers and clients furthers our ability to deliver top and bottom line growth and gives us confidence we will achieve our very attractive full year 2018 outlook as well as our long-term objectives.
With that, I’ll turn the call over to Eric.
Thanks, David and good morning everyone. In my remarks today, I will review Cigna’s 2017 results and provide our outlook for 2018. Key financial highlights for 2017 include consolidated revenue growth of 5% to $41.6 billion, consolidated earnings growth of 27% to $2.7 billion, earnings per share growth of 29% to $10.46 and continued strong free cash flow and $2.8 billion return to shareholders through share repurchase in 2017.
These results reflect the underlying strength of our franchise and provide us with considerable momentum for continued growth in 2018. Regarding our segments, I will first comment on Global healthcare.
2017 premiums and fees grew 5% to $29 billion driven by strong customer growth and specialty contributions across all commercial market segments and as expected, this growth was partially offset by lower seniors enrolment.
We ended 2017 with 15.9 million Global Medical customers, an organic increase of 710,000 lives which represents 5% growth over 2016. Full year earnings were $2.17 billion, reflecting growth in medical customers and specialty relationships, continued effective medical cost management and operating expense discipline.
Turning to medical costs, we continued to deliver medical cost that reflect better health outcomes as a result of our deep engagement and collaboration with customers, clients and physicians. Our focus on personalization of care and the power of our differentiated speciality integration model.
For our total U.S. Commercial book of business, full year medical cost trend for 2017 was better than the low-end of our previous guidance range of 3% to 4%. As David discussed, our commercial medical trend result once again reflects industry-leading performance and enabled our employer clients to make further investment in innovation, expand their workforce and grow their margins.
The total commercial medical care ratio or MCR of 79.9% for full year 2017 reflects the continued effectiveness of our medical cost management capabilities as well as the impact of the health insurance tax suspension. This MCR also reflects better-than-expected medical costs in our U.S. individual business, which generated a small profit in 2017.
The total government medical care ratio of 84.9% for full year 2017 reflects the impact of our innovative physician engagement model within Medicare advantage and is consistent with our expectations.
Full year 2017 Global Healthcare earnings also included favorable net prior year reserve development of $112 million after-tax. The Global Healthcare operating expense ratio of 20.9% for full year 2017 reflects the impact of the health insurance tax suspension, business mix exchanges and continued effective expense management. Overall, we’ve had another strong year in Global Healthcare.
Turning to our global supplemental benefits business. Our full year 2017 results reflect continued attractive growth and profitability as premium and fees grew to $3.7 billion an increase of 14% and full-year 2017 earnings grew 26% to $369 million, reflecting business growth, favourable point of experience and continued operating expense discipline.
For Group Disability and Life, full year 2017 premiums and fees were $4.1 billion. Full year earnings in our Group business increased to $285 million, reflecting strong performance in both our Disability and Life businesses.
Overall, as a result of the continued effective execution of our strategy, Cigna delivered strong revenue and earnings contribution from our Global healthcare, Global Supplemental Benefits and Group Disability & Life businesses in 2017. We also continued to generate strong free cash flow across our enterprise and maintain significant financial flexibility.
Now I will discuss our outlook for 2018. As we continued to drive strong value for our customers and clients, we step into 2018 with momentum in each of our businesses. As a result, in 2017 we expect to deliver attractive financial growth by deepening our customer and client relationships, delivering on-going superior medical quality and cost outcomes and continuing to invest in innovative solutions to more effectively engage with our customers and healthcare professionals.
For full-year 2018, we expect consolidated revenues to grow in the range of 7% to 8% over 2017 with continued growth across our targeted market segments. We expect full year 2018 consolidated adjusted income from operations to be 3.08 billion to 3.2 billion or $12.40 to $12.90 per share. This represents growth in the range of 19% to 23%.
This outlook includes approximately $425 million of incremental after-tax earnings resulting from U.S. corporate tax reform. I would note that this incremental earnings estimate is net of $150 million after-tax and additional investment in our employees, communities and partners as well as our capabilities that enable us to better serve our customers and clients while accelerating long-term growth.
For 2018, we project the consolidated adjusted tax rate in the range of 24% to 25%. Consistent with prior practice, our outlook excludes any contribution from future capital deployment as well as prior year claim [ph] development.
Now putting our 2018 outlook and our 2017 actual result on a comparable basis, that is adjusting for the reserve development reported in our 2017 results, and excluding the impacts from tax reform, our outlook for earnings in 2018 reflects 4% to 9% growth over 2017, and our outlook for EPS growth is 7% to 12% before considering the impact of additional capital deployment.
I will now discuss the components of our 2018 outlook starting with Global Healthcare. We expect full-year Global Healthcare earnings in the range of approximately $2.6 million to $2.68 million. This outlook reflects strength in our commercial employer business, driven by continued benefits from organic customer growth, specialty contributions and effective medical cost management as well as continued solid performance in our Medicare advantage business.
Key assumptions reflected in our Global Healthcare earnings outlook for 2008 include the following; regarding total medical customers, we expect 2018 growth in the range of 300,000 to 500,000 customers, driven by continued strong customer and client retention and new growth in our commercial business. And approximately, 3% growth in Medicare advantage customers.
Turning to medical costs. For our total U.S. Commercial Employer book of business, we now expect full-year 2018 medical cost trends to be in the range of 4% to 5%, with the increase over 2017 full year trend due to expected increases in utilization and pharmacy costs.
For our total commercial book of business, we expect the 2018 medical care ratio to be in the range of 77.5% to 78.5% reflecting the impact from the health insurance tax in 2018.
For our total Government book of business, we expect the 2018 Medical Care Ratio to be in the range of 84% to 85%. Regarding operating expenses, we expect our 2018 global healthcare operating expense ratio to be in the range of 22.5% to 23.5% reflecting the impact from the health insurance tax in 2018.
Now moving to our Global Supplemental Benefits business, we expect full year 2018 earnings in the range of $380 million to $400 million, reflecting business growth and continued strong operational performance.
And regarding the Group Disability and Life business, we expect full year 2018 earnings in the range of $330 million to $350 million driven by ongoing performance momentum in both our Disability and Life businesses.
Lastly, regarding our remaining operations that is other operations and corporate, we expect the loss of $230 million for 2018. To all-in for full year 2008, we expect consolidated adjusted income from operations of $3.08 billion to $3.2 billion, or $12.40 to $12.90 per share.
I would also remind you that our outlook continues to exclude the impact of prior year reserve development or any future capital deployment. Overall these expected results represent a competitively attractive outlook and underscore the strong performance of our diverse and differentiated portfolio of businesses.
Now moving to our 2018 capital management position and outlook, overall, we continue to have excellent financial flexibility. Our subsidiaries remain well capitalized and are generating significant free cash flow to the parent with the strong return on capital in each of our business segments, while we maintain significant free cash and leverage capacity available at the parent company.
Our capital deployment strategy and priorities remain, first, funding our businesses to support long-term growth, next, pursuing strategic M&A and lastly, after considering these first two items we would return capital to shareholders primarily through share repurchase.
Regarding free cash flow, during 2017 we repurchased 15.7 million shares of common stock for $2.8 billion, and we ended the year with parent company cash of $1.2 billion including $250 million held for liquidity purposes.
Considering sources and uses the parent company cash, we expect to have approximately $2.8 million available for capital deployment in 2018 including approximately $260 million we deployed to repurchase 1.2 million shares in January 2018.
Our balance sheet and free cash flow outlook remains strong, benefiting from industry leading margins and returns on capital in our businesses and the high level of capital efficiency, particularly from our fee-based businesses.
Now to recap. Our full-year 2017 consolidated results reflect the strength for our diversified portfolio of Global businesses and continued track record of effective execution of our focused strategy. The fundamentals of our business are strong, and we are confident in our ability to achieve our full-year 2018 earnings outlook.
With that, we will turn it over to the operator for the Q&A portion of the call.
[Operator Instructions] Our first question is from A.J. Rice with Credit Suisse. Sir, your line is open.
Thanks. Hi, everybody. Maybe just a broad question, but earlier this week this sector got little bit rolled by announcement of the three large employers that they will going to try something innovative instead of a joint venture. I wonder if you have opened any question, but one of you would comment on -- are you seeing that kind of activity among other large employers? What kind of opportunities and challenges might that present for Cigna? And I think there were specific discussions in the investment community about whether that had any implications for ASO business which I know is important for you and give you a chance to offer your thoughts on that as well maybe?
Good morning. It’s David. Clearly the announcement was not lost on us. So stepping back I think one way we look at the announcement is, it reinforces something we’ve been talking about for quite some time, which is – it’s a pretty dynamic industry and the older orientation around focusing only on insurance or a fee-for-service healthcare delivery model is just fundamentally not sustainable as employers and customers demand more.
Secondly, from our point of view, it reinforces the imperative of focusing on transparency, focusing on alignment and focusing on in a demonstrable way helping to ensure that you have the ability to drive healthy productive present employees and making employer's business better and more effective. I would point to as an example something we’re quite proud of not only the lowest medical cost trend in the industry year-in and year-out, but this year for 2017 we ended favorable to the lower end of our improved range, so less than 3% medical cost trend for the benefit of our clients and customers.
Looking forward, we actually see initiatives like this is actually presenting more opportunities than not. To your question there are been other different forms of coalitions forming, although this is a different coalition. Coalitions forming through the national business group on health, coalitions forming, you can look at it through private exchanges. And overtime each of them had presented opportunities interestingly for additional growth for us for both our medical and specialty offerings because we’re oriented around transparent aligned funding relationships.
So, taken as whole we view it as indicative of a changing dynamic environment, indicative of employers seeing this more as a strategic investment in the capital and employers seeking opportunities to get more leverage, more impact for the benefit of running the business and we can more opportunity than not.
Okay. That's great. And maybe just a quick follow-up on another topic, Eric, I think you mentioned that the guidance now assumes 3% MA growth this year. I know you're in that sort of rebuilding back to growth. I guess that my question would generally be would -- to get back to like market type of growth what needs to happen over the next six to 12 months and are you optimistic that as you look at 2019 and beyond that you could be get back to a market-based growth in MA?
A.J. its Eric. Yes, 3% growth is the number we expected for the year. I think in terms of getting back to our long-term targets which would be high single digits growth rate in terms of the revenue and associated lives in the Medicare Advantage really reflects our momentum and such no obstacle whatsoever from my perspective in terms of achieving that over the longer term. As we entered this year we had the effect of some exits of counties. We didn't open up any new counties or any new markets this year, but as we cleared to that January cycle and look ahead to the future, don’t see any reason why we couldn't get back to our and won’t get back to our long-term averages.
Okay, great. Thanks a lot.
Thank you, Mr. Rice. Our next question is from Josh Raskin with Nephron Research. Your line is open sir.
Hi, thanks. Good morning. Just a quick clarification, you talked about the 150 million sort of an offset on tax benefit. I just want to clear that up. Does that include some minimum MLRs and rebates and things like that? I know you guys have as much risk business, but does that included in the 150 and if so how much? And then my real question is just more on the retail presence and you know, your views on the necessity there maybe remind us have a HealthSpring clinics are working, how many of those you have, and sort of what the plans are? But I’m just curious what your perspectives are in terms of sort of that retail market for healthcare?
Josh, it’s Eric. I’ll start with the first part of your question, just be clear, yes, any impact from the minimum MRL, rebates and such are included in the $150 million. The amount is small in terms of a portion to that given the profile of our book of business and such, but that is included in the 150. I’ll ask David to comment on the other item.
Josh, good morning. Two comments specific in general. Specific to your question, think about as today as we operate before we get the HealthSpring. We’re able to operate and deliver quite good services for employer clients through on-site clinic management and coordination, on-site health coaches, management and coordination, in select instances, on-site pharmacy management coordination, so think about that is one retail point of interaction that we do on a highly integrated basis.
Secondly to your HealthSpring question, HealthSpring model, as you recall, there are different footprints and different geographies, we can go as broad as the Cigna owned medical group in Arizona to owning bricks and mortar real estate in Tennessee and having independent physicians rotate through that and everywhere in between. I think more broadly stepping back as it relates to retail footprint, our strategic view is that virtual vertical integration is a preferred approach versus wholesale vertical integration on a hardened basis.
So what we mean by that is we are through virtual vertical integration, we’re able to drive improved alignment, choice and transparency where we aggressively embrace technology to expand access and choice and where we partner to create a more open framework to expand choice and impact through affordability and personalization. So, again, we have a variety of footprints, but we really prefer and are driving aggressively the vertical integration through a virtual mechanism to get that alignment, the impact, the choice and embrace technology.
Okay. Perfect. Thanks.
Thank you, Mr. Raskin. Our next question comes from Ralph Giacobbe with Citi. Sir, your line is open.
Thanks. Good morning. First, just want to ask about the $18 in EPS in 2021, obviously some of that tax reform, but just looking on a CAGR basis it suggested about 12.5% growth. And if I look at the $16 number was closer to 11%. So, just wanted to sort of bridge that in terms way you expects sort of faster underlying growth beyond tax reform from where we were not that long ago on you threw out the $16 number? Thanks.
Yes, Ralph, when we discuss the $16 number at our Investor Day, obviously we walked through a pretty methodical framing of that. So, stepping back we’re quite pleased to be able to put that forth the framing of the four growth platforms and the very attractive growth profile of each of those platforms led by strong retention, further relationship expansion and net new business adds.
To your question, what’s net new? I’d ask you to think about two things, right. The underlying strength of our platform, we ended 2017 ahead of our strategic glide path period. We delivered an EPS growth rate of 29%. We’re able to step into 2018 with an outlook as Eric articulated to grow our EPS by 19% to 23% before reserve development or any additional capital deployment. So point one is the organic fundamentals ended the year stronger which gives us more leverage power stepping into 2018. Second, is the impact of tax reform and our belief in terms of the combination of both of those enable us to increase the outlook from a very attractive $16 to even more attractive $18.
Okay. That’s helpful. And just the follow-up, has there been any push back on ASO fees from existing customer just on the fee itself. And then as you look across your book it sort of the average trend that you mention sort of below the 3% level. Do you see differences in trends between large nationals that may not be willing to adopt some your medical management approaches versus the smaller select and mid markets that maybe more willing to adopt your approach? Thanks.
Ralph, first relative to ASO fees, as you may recall from prior conversation we typically don't look at an employer relationship as a fee-only relationship. Our entire approach with our employer clients at all levels. So from select through middle market, through national is to look at the portfolio of services that best suit their strategy, their change agenda and have the highest opportunity for impact vis-à-vis some of the integrated offerings I made comment on -- before my prepared remarks. And then get an economic relationship with them that work in a quite transparent basis.
So we’ve long since moved from micromanagement of the fee environment and candidly I would view the fee environment as a smaller part of the overall conversation. To your broader question relative to medical cost trend and the like. The positive [Indiscernible] it transcend the portfolio, right, as you recall ASO aided by further shared returns encompasses over 90% of all of our relationships. So that positive medical trend performance is indicative of the entire portfolio and the performance of the portfolio and what tends to drive it to such a powerful level is the alignment with the employer and transparency, highly innovative clinical programs and engagement incentive-based programs and then increasing leverage of the collaborative accountable care relationships that we’re able to deliver for the benefit of our clients.
Ralph, it’s Eric, one other point on what David said there and as David noted in his prepared remarks this morning, the effectiveness of the integration of the specialty model helps to drive even more effectiveness in terms of trends. So as we have highly integrated offerings in the smaller end of the market I generally see even the better results than the bottles that are little more a la carte or fragmented.
Okay. Thank you.
Our next question comes from Zach Sopcak with Morgan Stanley. Zach, your line is open. [Operator Instructions]. Our next question will come from Matt Borsch with BMO Capital Markets. Mr. Borsch, your line is open.
Yes. Thank you. You know, I was hoping you just maybe extend a little bit on the reaction to the joint venture of the three companies. And maybe just I get the consideration of the employer coalitions and the ones that we've seen before. I think maybe what also rattled investors though is couple of things; the tone of dissatisfaction and frustration with the medical cost outcomes, somehow being just opposed with poor profit orientation in healthcare, as well as the prospect of this gigantic tax behemoth that's disrupted other industries maybe they're just coming in to do this coalition, but perhaps its more than that. Can you just address that? I know it’s wide open, but whatever you can say.
Matt, it’s David. First nice job trying to displace Zach from the call queue; and Zach will get back to you as quickly as we can. Matt, I think just part of your question and I appreciate the way you framed it. I mean, at the end of the day we have talked for quite some time, while the industry as a whole for example may step back and we have a narrative around more stabilized or more muted medical cost trend. We as a company been very consistent, it is still unsustainable. So as I illustrated in the prepared remarks for example, a 1000 life employer experiencing illustratively our medical cost trend versus the industry average is a multimillion dollar savings and we believe we need to do even better.
So, when you look at the size and impact of medical cost trend growth being an industry average of six or seven or our industry-leading trend of below 3% this year, employers will rightfully continue to push for more value from their sizable investment and increasingly they see this disinvestment as a strategic investment and we’ll manage it as a strategic investment to help them run their business more effectively.
Over time we think that creates more opportunity versus less for us, because we seek to be at an integrated partner for the services standpoint providing the services that deliver the value. As you know our industry is capital-intensive, as well as relatively low margin, single-digit margin, so this is not going to get solved with extracting a couple points of margin out of the equation. The solution here is helping to keep people healthier in the first place, to avoid health risk, health consumption, lowering the health risk for the 25% of Americans that are medium and high risk will be chronic or acute in two years of those risk don’t go mitigated and getting the best possible evidence-based care compliance for those dealing with chronic condition and then optimizing care delivery for those confronting acute conditions.
That's how the sustainability of the system is driven and employers flexing their muscle and becoming more vocal in terms of driving and being more demanding around that we actually view as a net positive, because we think the employer market is a positive aggregation of individuals and a way to get strategic alignment. So to recap, we should not view that an industry with stable medical cost trend at 5%, 6%, 7% is sustainable. We’re proud of the fact that we delivered half of that. We need to do better and you do better by engagement, alignment and driving health improvement and getting the best possible quality of care when care is consumed.
Thank you.
Thank you, Mr. Borsch. Our next question will come from Justin Lake with Wolfe Research. Your line is open.
Thanks. Good morning. Just handful of number of questions here from me. First on the 2021 numbers change, sounds like to the great extent this is the improvement in taxes and some improved business momentum. On the tax side you're looking out for years and obviously assuming that a lot of this is sustainable. Can you walk us through kind of your thought process on sustainability of higher effective net income margins as you go through kind of competitive iteration over a few years?
Justin, its David. Good morning. I guess couple of thoughts. First to reinforce, the $16 starting point was based on strong fundamental sustained organic growth for franchise and then effective capital deployment. Yielding is as you would recall, a very attractive result. The step up these two items, I don't want to walk away from the stronger results we deliver in 2017, put us ahead of us to glide path and give us leverage going forward.
Specific to the taxes, as you know in the U.S. we’re predominately a service-based business that has higher transparency versus not, as Eric articulated earlier there’s relatively de minimis impact of the taxes on my minimum MLRs and the like, so we have more flexibility or choice with which to deploy it. For 2018 we made a very disciplined assessment of how to invest if you will those assets for sustained growth on a go forward basis looking at our customers, our clients, our community, our coworkers and our shareholders. And we’re quite confident that it’s a long way -- as we have continued innovation and effective execution we’ll be able to both deliver the value for clients and customers as well as realize a fair return for shareholders. So we see a lot of opportunities as we look for between 2018, 2019 and 2021.
Great. And then, on the two things; one, Disability and Life, 7.5%, 8% margins is where you were before the issues kind of occur there. By my estimate it doesn’t look like you got back to your 7.5% to 8% margin that you used to do there with the guidance. Is there some reason for that? And is the true? And then on membership growth can you just give us some color on where the segments beyond Medicare Advantage ASO versus commercial risk versus experience rated, where you expect that membership to come? Thanks a lot.
Justin, it’s Eric. As it relates to the Disability and Life, we think the guidance we’ve provided is attractive and align with our long-term strategic targets. So again we think that business is performing in line with the strategic targets that we set for it over the long-term. As it relates to membership growth we would note a couple of things that's tying up comments David made in his prepared remarks, first of all, continued really strong momentum in the select segment in the middle market segments in particular we would see a growth there and across the insured versus ASO split again, we’d expect growth across each one of the funding arrangements as we go into 2018.
All right. Thanks
Thank you, Mr. Lake. Our next question is from Zach Sopcak with Morgan Stanley. Your line is open sir.
Thank you. And sorry about difficulty earlier. I just wanted to circle back on the comment Eric made on cost trend for 2018. And he mentioned potentially increased utilization. Is there anything that you’re seeing in January that makes you think that utilization going to up a bunch? Or is it just coming off of a low in 2017?
Zach, it’s Eric. Nothing specific I would call out in terms of things that we’re seeing that would – I would point to you. I think its more just coming off of the low trend that we delivered in the course of the of 2017. In particular we had very favorable pharmacy trend in the course 2017. We finished 2017 with pharmacy trend that essentially zero. We wouldn’t expect that to be the rate going forward, but again, we pull those pieces together overall and nothing I would point to in terms of specifically higher utilization.
Okay. That was it. Thank you.
Thank you, Mr. Sopcak. Our next is from Kevin Fischbeck with Bank of America Merrill Lynch. Sir, your line is open.
Great. Thanks. If you go back to one of deal with Anthem growth, how you outlined about 7 billion of kind of capital available for deployment [Indiscernible] if you wanted to do M&A. Where do we stand in those numbers now? And then, I guess you mentioned that there was foreign tax, one-time tax in a quarter. So that mean, we repatriate in cash in 2018?
It’s Eric. Couple of parts to that question there. First of all, as it relates to the seven to 14 items, so we issued the $7 billion to $14 billion range at the time of the Anthem break just to help provide some framing. At that time the $7 billion end of the range represented capital available for deployment that we had on the balance sheet, plus the impact of the break fee, plus the additional leverage capacity that we had to return to more normal range. The upper end of that range represented what we could do if we took additional leverage and pursued a strategic M&A transaction.
Now, as I noted in my prepared remarks, we expect to have your $2.8 billion or so available in 2018 plus still significant balance sheet capacity. So, again, the overall framework that we described in terms of the $7 billion to $14 billion continues to apply, will continue to be disciplined in terms of our approach on deployment and such overall.
On the second part of your question, could you just repeat the specifics, I want to make sure I'm answering it appropriately.
I think I thought somewhere in your prepared remarks you indicated that you were -- it was like a one-time tax on foreign earnings as part of tax reform. And I wasn't sure if that meant that you were repatriating cash in 2018 or are you saying cash in 2018 is the question. And if so how much of that is that $2.8 billion.
Yes, the specific item there that we talked about in the terms of the tax associated with the foreign earnings is the repatriation portion of the recently reformed tax law. We are not anticipating significant repatriation and the tax law hasn't really changed our plans in terms of how we bring dollars back. We generally have used overseas capital to support the growth outside the United States and we continue to do so.
All right. Thanks.
Thank you, Mr. Fischbeck. Our next question is from Christine Arnold with Cowen. Ma'am, your line is open.
Hi there. Thanks. Two questions. First you're less than 2% trend, can you remind us does that include or exclude buy downs? And if it includes buy downs, could a reduction in the corporate tax rate cause, kind of a pause in that? How are you thinking about that?
And then second you've talked a lot about Medicare Advantage and I understand 2018 is a repositioning year, how do you think about Medicare Advantage long-term? Do you feel like you can get to the footprint and the growth rate you need organically? Or do you feel you know that maybe something more strategic from an M&A perspective might be required in that area? Thanks.
Christine its Eric, I'll start with the trend item and then ask David to comment on the Medicare Advantage pieces. So, the trend, the trend statistics we talk about on this call represent our U.S. commercial employer paid claim trends across all of our book of business.
And, again, just as a reminder given that over 85% of our customer lives are self-funded, this statistic represents the amount that our clients are spending per customer per month year-over-year. There's no other adjustment or anything in terms of how we calculate that trend.
Now, the difference between that paid trend or what you might call in a loud trend, the loud trend will help to include the effective cost borne by the individual customer in terms of deductibles and copays etcetera.
Given that we tend to have high customer retention from period-to-period our clients generally have pretty stable benefits from period-to-period that we haven't seen much difference between paid or allowed trends. But if you look at that allowed basis that includes the effect of car-sharing and such for 2017, our trend actually would have been even a little bit lower yet than the paid trends that I talked about in my prepared remarks. David, if you want to tackle the Medicare Advantage question.
Hey, Christine relative to Medicare Advantage in Medicare Growth, we continue to see it is an attractive opportunity to immediate long-term for us. I would ask you to think about it in a couple of ways. First relative to further accelerating organic growth, as Eric indicated, we view 2018 as a transition year. As we step into 2019 and beyond, we believe significant opportunity to open new markets and adjacent counties.
We are aided by the fact that we have a deep collaborative accountable care relationships in multiple states in multiple markets that are highly attractive for us for growth. Those relationships are focused on commercial today and many of those collaborative partners are excited to open up new Medicare Advantage relationships with us.
So, we see the organic new market entry opportunities for 2019 and beyond is very attractive and in addition as you'll recall, we continue to have Medicare and seniors footprint growth as one of our M&A priority. So, it's one of our five M&A priorities. So, we see both opportunities through both organic expansion as well as inorganic expansion to generate sustained growth there.
Thank you.
Thank you, Ms. Arnold. Our next question is from Steve Tanal with Goldman Sachs. Your line is open sir.
Thanks for taking the question. I just wanted to circle up on tax reform, may close the loop on this. The $150 million of reinvestment sounds like an after-tax figure, and just using the tax rate, I guess, the pretax amount is maybe closer to $200 million. I just wanted to confirm that the way tax announced yesterday are sort of $45 million of that amount? And maybe get some color on specifics of where the rest will be reinvested. And then just finally, tying up some comments earlier around sustainability of medical cost trend generally, when do you see deflation if the – we continue down this path?
Steve, good morning, it's David. I'll address the taxes, and I'll ask Eric to talk about the medical cost trend and your interesting twist on it with deflation. Specifically, relative to investments, you've framed it correctly, we're talking about after-tax numbers, what are the implication, etcetera, but we're talking about a meaningful investment back into multiple key constituency group. So, you articulated rightfully, significant amount of investments back into our coworkers.
And the next part that I'd ask you to think about is, furthering investments back in the company relative to innovation and innovative capabilities. We have had a long sustainable track record of designing and bringing new solutions and capabilities to market. We're going to take this opportunity to even further accelerate that in 2018, so a meaningful portion of the $150 million will make its way there.
And then third category we referenced is, returning it back to the marketplace beyond that, so opportunities relative to furthering our community initiatives through our foundation and the like. Taken as a whole, that equates to approximately the 25% in aggregate of the impact that we talked about, making up the $150 million. Eric, if you share your thoughts relative to medical trend?
Yes, Steve, on the medical trend. I think a couple of points that I want to make sure land here. First of all, our trend results reflect the power of the incentive line and the power of our integrated model. And again, we're really proud of the result that we generated there. But as David said before, there is more work to be done. Not to -- to be able to predict the day or time that we hit the -- a point of deflation but there's more work to be done and we think there's quite a bit more we could tackle with the integrated model that we bring to the market.
Okay. Thank you.
Thank you. Mr. Tanal. Our next question is from Gary Taylor with JPMorgan. Your line is open.
Hi. Good morning. Just wanted a little more detail on some of the segment guidance that you provided. Is it possible just to walk through by segment, what tax rates would look like by segment for 2018 embedded in your guidance?
Gary it's Eric. That plan into numbered the exact kind of tax rates by segment, but what I encourage you to think about the things in the following way. So, within the Global Health Care and Group Life and Disability business, the largest share of those businesses are here in the U.S. and that's where the bulk of our businesses, so you would expect to see the biggest impact there. And those businesses the impacted by U.S. tax reform.
The Global Supplemental Benefits business has a net tax headwind year-on-year that some of our non-U.S. jurisdictions have actually increased income tax rates so just a slight increase in terms of Global Supplemental Benefits business.
And then within corporate and other operations, there's a tax rate favorability, but earnings headwind reflecting that segment where operating had a loss in total. So, those would be that piece that I would point you too.
And as a quick follow-up. So, when we look at the corporate cost increasing 45% or so year-over-year, there's a tax that's -- I guess, that primary delta you're seeing is the tax treatment within that segment. Is that correct?
Gary, year-on-year, there's two things that point there both tax-related. First of all is the effect of the lower tax rate in 2018 and the second is the absence of some tax favorability that we had in 2017. So, some tax-related items, so it's separate from the income tax rate that we talked about earlier in the year in 2017. We don't expect those to return next year.
So, the 230, that's a good go-forward on corporate expense though?
Yes.
Out years. Okay. Thank you.
Thank you, Mr. Taylor. Our next question is from Ana Gupte from Leerink Partners. Your line is open, ma'am.
Yes, hi, thanks for the question. So, coming back to the basis of the diamond coalition. I guess, at the end of the day, is it because insurance companies are not communicating the value that they are delivering well enough for? And you should -- the company be thinking of it from the point of view of the American consumer and make it simple? They see lack of transparency on the pharmacy side of the house? And was there anything significant that can be done by Amazon on that?
Secondly, on the buy downs and increase in deductibles. Consumer's think of the insurance at this point is just becoming catastrophic coverage at best. And then finally, on kind of breaking it down between pricing and utilization, do you see the opportunity for the private managed care and to see the improved things on pricing? Or might be even get worse as we are seeing even more consolidation among the large not for profit hospitals at this point?
Ana, it’s David. So, multiple different questions, and let me try to address a couple of themes and invite Eric to add to it. I'm not sure we're going to be able to address every complexity referencing your question.
In the first question, I think about it in a couple of ways, right? As indicated before, this is an example of three large impactful voices, essentially suggesting that there's an opportunity to do more and they're going to lean in aggressively to enable more to be done whether it's through technological leverage, whether it's through insight and data, whether it's through insight and data, whether it's through a variety of items. But each one of those entities, essentially are ASO-serviced.
So, if they're ASO-serviced, they're bearing their own risk and they're going to elevate the demands both for the parties they do business with as well as for their coworkers who are engaging in the overall equation.
To your inference, I think there's opportunity and transparency, there's further opportunity in alignment, there's further opportunity in simplifying the complex. That's all on strategy from our point of view and we believe we have an opportunity to add value in every one of those areas. But it also means that the consumer and the employer need to more aggressively embrace change along the way. Net-net, we see of all of it as a positive.
On your last point, I don't know. I don't know relative to the inference, relative to the consolidation and not for profits cost implications, et cetera. I would put into face of that two forces that are indisputable right now. One, you made reference to yourself, which is a relentless increase drive for transparency and demonstrable value delivery.
And second, reword alignment relative to value-based care. I think those forces are indisputable and will confront any level of change and configuration of the supply chain or otherwise to push for more demonstrable value delivery and then elevation and transparency across care and quality. Eric, anything to add?
Ana, it's Eric. Just one other thing I would add relative to your comment about buy downs and such. I think one of the things I've noted -- and I've actually noted in the -- my response to Christine's question about paid versus allowed trend is actually, our allowed trend would have been a little bit lower that's because in 2017 versus 2016, our employers paid a little bit higher percentage of the cost than the employees. So, it's actually the opposite of cost shift in terms of 2017 versus 2016.
I think what's most important, rather than just shift between how much the employer pays versus how much they employee pays is the power of getting incentives aligned with appropriate and well-designed plans to help reduce the overall cost burden of the programs and such overall. So making sure that the smart way design benefit plan helps to bring the cost down for both parties rather than just doing kind of cost shifting as the mechanism for employers to move things.
Thanks for the color. Appreciate.
Thank you, Ms. Gupte. Our next question is from Chris Rigg with Deutsche Bank. Sir, your line is open.
Hi. Good morning. Just wanted to ask about the Global Supplemental business, particularly relative to where you started the year in terms of guidance and where you ended the year. You outperformed that number by about 20%-ish. Can you give us a sense of what drove that outperformance? And then when we think about 2018, it sounds like there might be some kind of tax impact there. But is there any sort of core reset to the profits that you're assuming given the outperformance in 2017? Thanks.
Chris, its Eric. I'll start with a couple of comments there for you. So first of all, within the Global Supplemental Benefits business, we're really pleased with the year that we delivered in that segment. That point of three macro drivers in terms of the result that we generated in the course of 2017.
First of all, we've had – continue to have favorable experience relative to our initial expectations. We've had continued growth in the business, we've been -- continue to be very disciplined in terms of the expense leverage and the expense management that we've delivered there.
Additionally, at the beginning of 2017, based on where the spot rates were at the time, we had anticipated the potential for some potential foreign exchange headwind, and that has actually turned into a headwind for us. So, those are all pulled together in terms of drivers of our results in 2017.
Now, looking forward, the things I would point to in terms of drivers there, we do assume that there would be a bit of normalization in terms of that claim experience as we look ahead to 2018, one.
Two, we, as I noted on the tax rate question from a prior caller, we do expect a little bit higher tax rate on that segment going forward. And then as it relates to foreign exchange or FX, no particular headwind or tailwind we'd call out at this point.
Great. I'll leave it there. Thanks a lot.
Thank you, Mr. Rigg. Our next question is from Sarah James with Piper Jaffray. Your line is open, ma'am.
Thank you. First, a clarification on guidance. Interest rate is expected to increase two times or three times this year. So, does guidance reflect increasing interest rates as a benefit to investment income either for the 2018 guidance or the 2021 guidance?
Sarah, its Eric. As it relates to interest rates, so our guidance and our outlook assume our macro case, which does reflect a bit of rising interest rate. But I note that the impact of interest rates has to play out over a number of years. We tend to be buy and hold investors and as a result, any changes up or down in interest rates outplay themselves out through the P&L over a pretty long period of time.
And no material impact on your 2018 guidance then from interest.
No, nothing that I would call out, Sarah, as a driver.
Okay. And in the past, you stated that there is some interest in LTSS. But if I looked historically, companies with a strong Medicaid background are primarily the winners. So, would you be opening -- open to strengthening your process by acquiring Medicaid assets with some mixed books, including high and low acuity? If not, how do you feel that Cigna can get an edge in competing on LTSS without a track record of cost savings and Medicaid?
Yes, it's David. Our review has been and continues to be that over time, states will continue to modify their approach to populations both as defined today, but defining on a go-forward basis, additional sub-segments of the population and then seek the vendors, carriers or partners that can give them the best value relative to the populations.
As you articulate today, we're not a large player in any of those spaces. But over time, we see that marketplace change as a potential future opportunity for growth and we will leverage both organic capabilities and opportunistically, inorganic activity relative to that. But we think the marketplace is going to evolve over time and this presents an additional possible long-term growth opportunity for us as the marketplace changes.
Thank you.
Thank you, Sarah. Our next question is from Dave Windley with Jefferies. Your line is open.
Hi. Good morning. Thanks for taking my question. I wanted to come back to Medicare Advantage. David, I think you've talked about 2018 being a year where you will maybe improve margins but not get back to target levels in 2018. So, point of the question number one would be kind of what's your view on glide path on M&A margins?
Second that I would presume in that you would expect growth to help you leverage that business and bring margins back up. You've talked about 3% enrollment growth over the course of this year. It looks like your performance, at least in the AEP [ph], was strongest in what would have been HealthSpring and Bravo had a long-standing markets and less well in maybe some of the more recent expansion markets.
Curious what that -- what your views are? What that tells us about the ability to expand that HealthSpring specific model into adjacent markets? And how you view that over the next year or two? And then finally, STAR's mitigation and how that influences that growth as well over the course of 2018 for 2019? Thanks.
Yes, packed a lot in there. So, maybe quickly and simply, we see further margin expansion opportunity period relative to the line of business over time both driven by disciplined performance in the MOR range as well as expense leverage that you articulated. So, we'll opportunity to further expand the margin over time.
Second, your articulation of the growth profile in terms of the immediate timeframe is right. That was deliberate in terms of our positioning of those market places, and it further validates or reinforces that where we have highly aligned value based physician relationships, the performance and the value return to customers, beneficiaries and physicians is quite strong, but we don't -- the value proposition is a bit less strong.
As I mentioned in prior remarks, we're delighted with the fact that we now have multiple markets with quite mature, highly performing collaborative where we have demand from those physician groups or integrated hospital systems to aggressively enter the M&A marketplace over time. So, it's a good reinforcement and learning relative to the value having the aligned physician relationship and the proven performance, as opposed to starting that build from scratch.
Lastly, relative to STARS, we were in 2018, about 60% from a four STAR+PLUS plan with all of our mature markets by one performing where we expected it today. For 2019, we are optimistic that we will get recognition to the proper positioning of our products and our capabilities. Our Net Promoter Score and [Indiscernible] outcomes continue to be quite strong and we have multiple leverage and tools to work with CMS to ensure they were properly positioned for 2018. So we are looking forward to the 2019 selling season.
Great. Thank you.
Thank you Mr. Windley. Our last question will come from Michael Newshel with Evercore ISI with Evercore ISI. Mr. Newshel, your line is open.
Hey good morning, thanks for taking me in. So, last summer you had announced collaboration with CVS to leverage pharmacy interactions in the clinic. Is there any change to how you see that evolving given that pending transaction with Aetna? And are you considering doing anything similar with other partners? And also is there any change you are thinking about the future of your PBM relationship with Optum given the recent actions among your peers?
So Michael two points, you are correct. First stepping back we are – we view partnering with others as a critical capability. In fact you might recall from a investor day dialogue being the undisputed partner of choices and have borne strategic comparative to continue to drive the right value for our customers and clients and as we go forward. That relationship we entered into the CVS down in Florida was an innovation that both parties wanted to do to try to drive improved outcomes. We don’t have any discernable deliberate differentiated outcomes to point to at this point in time, but it’s indicative of our test and learn approach, our collaboration and are willing historically multiple partners, so you could view that is indicative of both today and in the future which would be to have multiple partnership arrangements up in running today.
As it relates to the PBM, as Eric articulated we delivered a pharmacy trend in 2017 potentially zero with high clinical outcomes and continue to grow that business. So our proprietary owned PBM continues to perform quite well, back to partnership we have an orientation round, willingness and ability to partner with others to increase value for the benefit of our customers and clients and I think its a spectacular example of smart, well aligned partnership capabilities and being able to deliver better value for customers and clients is indicative of high clinical quality outcomes growing the platform and zero medical cost trend. So we view partnership as mission critical on a go-forward basis and a lot of bright spots to point to over the recent past.
Thank you Mr. Newshel. I will now turn the call back over to David Cordani.
Thank you everyone. Let me just move to wrap up our call with a few headlines. First, overall we delivered very strong result in 2017 with key performance across all of our priority growth platforms. Commercial employer, U.S. Senior, Global Supplemental Benefits and Group Disability & Life led by delivery of continued industry leading medical cost trend.
In addition, in 2017 Cigna grew to serve more than 95 million customer relationship worldwide. Relative to overall expectations for 2018, we will continue to create differentiated value for our customers and clients and as a result for your shareholders through consistent focus on delivering affordability and personalization as well as partnering with healthcare professionals to ensure our customers receive the highest quality healthcare.
Each of our four growth platforms remains well positioned for sustained growth, in addition we have an exceptionally strong ongoing capital position. We expect to deliver revenue growht inline with our long term objective of high single digit growth rates and we have an outlook for 2018 that anticipates a 19% to 23% EPS growth rate over 2017 all of which gives us confidence to increase our long term EPS target from $16 per share to $18 per share by 2021.
We thank you for joining our call today and look forward to further conversations.
Ladies and gentlemen, this concludes Cigna’s fourth quarter 2017 results review. Cigna investor relations will be avaliable to respond to additional questions shortly. A recording of this conference will be avaliable for 10 business days following this call. You may access the recorded conference by dialing 888-566-0596 or 203-369-3072. Thank you for participating. We will now disconnect.