SCAN Health Plan

SCAN Positioned Ahead of the Cigna-HCSC Acquisition. Two Variables Now Determine Whether the Gains Hold.

SCAN's April 2026 enrollment of 440,516 — up 46% year-over-year — reflects disciplined positioning ahead of a publicly known ownership event. A Texas service-area filing executed one month before the Cigna-HCSC acquisition closed, and a California AEP surge concentrated in the quarter HCSC-contract members were evaluating whether to switch, are both visible in CMS enrollment data. This brief covers what the data shows, what it doesn't resolve, and where CircleEngage has direct operational relevance.

The +123K California gain is concentrated in the AEP window and in the counties where the ownership change occurred — making it predominantly a switcher cohort rather than organic growth. SCAN entered 2025 as the 6th-largest carrier in its own CA counties and ended 2026 at structurally larger scale. Simultaneously, H5425 — the core CA contract carrying 98% of SCAN's California members — dropped 0.5 stars to 4.0 in the 2026 ratings cycle. The star decline doesn't breach the QBP bonus threshold, but it is the retention headwind for a cohort that selected SCAN while evaluating alternatives.

SCAN filed its Texas service area in November 2024, one month before the acquisition closed, and captured 3,584 members through only two of four counties in their first full AEP. Fort Bend and Montgomery were added in January 2026. AEP 2027 is the first cycle the full Bexar / Harris / Fort Bend / Montgomery service area bids — and the first real read on whether the Texas position scales into share. SCAN captured roughly 2.2% of the 161,234 members in those counties facing the ownership change. The pool is not sitting still: HealthSpring — the HCSC brand now operating the legacy Cigna contracts in those counties — is declining at 29.4% year-over-year in SCAN's markets. The switching is driven by two reinforcing forces, not one. First, members are re-evaluating following the ownership change. Second, CircleEngage's NC plan analysis of 298 contracts shows HealthSpring/Cigna contracts went non-commissionable on plans that were 66% lower on OTC allowances than their commissionable counterparts — and those NC contracts declined 17.9% post-NC. The broker channel on those specific contracts went dark. Members aren't just confused about the new plan name; no one is proactively calling them at renewal. AEP 2027 is the window to capture that flow before it disperses to UnitedHealth, Aetna, and Humana.

SCAN currently has no affiliated Medicaid MCO in any of its six states. The CY2027 final rule retained the CY2030 requirement that D-SNPs in markets where the parent also holds a Medicaid MCO contract must pursue exclusive alignment. The HealthRight/CareOregon transaction — attempted in 2022, withdrawn in 2024 following Oregon regulatory concerns about local Medicaid control — shows SCAN identified the structural problem early. The same question presents in each new state as the national footprint extends.

Two Distinct Strategic Responses to a Single Ownership Event

Cigna sold its Medicare Advantage book to Health Care Service Corporation (HCSC) in a deal announced January 2024 and effective January 2025. The acquisition affected 401,270 members across SCAN's 19 California counties and 161,234 members across the four Texas counties SCAN later bid into. While HCSC absorbed Cigna's contracts and continued operating them, the ownership change created a member-choice window during AEP 2026 — members who had selected Cigna for its network, brand, or benefit design now had to evaluate whether the HCSC-operated version still fit their needs, or switch to an alternative. SCAN was positioned to capture that flow.

California: AEP Capture from the Acquisition-Driven Choice Window

SCAN entered April 2025 with 294,347 members, already among the largest carriers operating in its own 19 California counties. With 401,270 members in those counties facing an ownership change in their plan, SCAN was the largest nonprofit option available in the broker market. Enrollment data confirms the capture:

Texas: Preemptive Service-Area Entry

SCAN's Texas service-area filing first appears in November 2024 — one month before the Cigna-HCSC acquisition closed — covering Bexar and Harris counties. SCAN held 430 members by April 2025. In January 2026, SCAN extended its Texas service area to Fort Bend and Montgomery, expanding into the Houston suburban market. April 2026 enrollment stands at 3,584 members, an 8-fold increase from the prior-year base.

In context against the competitive opportunity: SCAN captured approximately 2.2% of the 161,234 members in those counties who faced the ownership change and had the option to switch. The pool of members who have not yet switched from HCSC remains substantially available to competing carriers. AEP 2027 is the first cycle in which SCAN bids the full 4-county service area.

State-Level Enrollment Summary: April 2025 vs. April 2026

California accounts for the majority of absolute volume. Arizona, Nevada, New Mexico, and Texas reflect the highest percentage growth rates as scale-up markets at early stage:

IN and LA reflect residual contracts outside SCAN's stated 6-state national strategy — likely legacy from prior acquisitions or co-branded arrangements. Excluded from forward-looking analysis but shown for completeness.

Four Transaction Types, Consistent Selection Logic

SCAN's Cigna response reflects the same strategic discipline as its broader corporate development pattern: positioning ahead of known structural events through whichever transaction structure offers the most efficient capability extension. Over the past five years, SCAN has deployed four distinct structures — each selected by fit with the capability gap and the counterparty, not by a preference for any particular structure:

The selection logic across all four structures is consistent: SCAN extends capability through the structure that minimizes execution friction for that specific opportunity. Care delivery integration is the criterion; ownership structure is the variable. SCAN's response to the Cigna-HCSC acquisition — filing a Texas service area in November 2024, before the transaction closed — reflects the same analytical discipline as these transactions applied to market positioning.

Two Variables Determine Whether the 2025–2026 Gains Hold

SCAN closed Q1 2026 at structurally larger scale in both California and Texas. The durability of those gains depends on two variables, each with a distinct intervention window.

CY2030 Exclusive-Alignment Requirement: Unresolved for SCAN's National Expansion

The CY2027 final rule (CMS-4208-F, published April 6 2026, Federal Register Vol. 91, No. 65) retained §§ 422.107 and 422.514 from the April 2024 rule. Together, these provisions establish that where an MA organization offers a D-SNP and that organization (or a parent / affiliate) also contracts with the state as a Medicaid MCO in the same service area, the organization must pursue exclusively-aligned enrollment. Beginning CY2030, D-SNPs in such configurations may only enroll members also enrolled in the affiliated Medicaid MCO.

The narrow regulatory text doesn't capture the broader market implication. CMS policy direction across multiple rulemakings is consistently moving toward integrated, exclusively-aligned dual-eligible enrollment as the standard. Plans that lack a Medicaid MCO partnership in their D-SNP service areas face a structural disadvantage even where the rule doesn't yet prohibit independent operation. Across the MA market, this is forming the next M&A wave: Medicare-focused plans pursuing partnerships, joint ventures, or mergers with Medicaid MCOs in the markets they want to serve.

SCAN read the alignment problem early — but the deal was withdrawn

The HealthRight Group transaction with CareOregon, announced in 2022, was an attempted alignment-style move — a combination of SCAN's Medicare expertise with CareOregon's Medicaid presence inside a single mission-aligned structure. The transaction was withdrawn in February 2024 after Oregon regulators raised concerns about local control of Medicaid dollars under a multi-state parent. The strategic instinct was right and ahead of the regulatory direction; the deal-level execution ran into state-level Medicaid politics that any national MA expander attempting cross-state Medicare-Medicaid integration will need to navigate.

What the withdrawal left open is now the structural question SCAN's national expansion has to answer. SCAN currently has no affiliated Medicaid MCO in any of its six states. As the footprint extends across CA, AZ, NV, TX, NM and WA, the alignment question presents differently in each: a different Medicaid MCO landscape, a different state regulatory posture toward out-of-state ownership, a different set of plausible partnership counterparties. The Oregon experience is the cautionary tale — not a reason to avoid the move, but a reason to design the next attempt around state-level governance from the start rather than around national-scale efficiency.

The Texas Variable Is a Distribution Problem Before It Is a Data Problem

AEP 2027 outcomes in Bexar, Harris, Fort Bend, and Montgomery will be determined largely by broker network density in those specific counties — who brokers are contracted with, which plans they're actively presenting, and how deeply SCAN's plan is embedded in the broker relationships that drive enrollment decisions in the Houston metro. This is not a question that plan benefit design alone resolves. It is a distribution question.

CircleEngage has active broker relationships in those four counties. That is the specific and non-generic reason this brief exists. The company also operates a national market data pipeline that tracks enrollment signals, carrier positioning, and distribution channel changes at the county level — which is what surfaced the Cigna-HCSC timing and the specific opportunity pool in SCAN's Texas counties. Both capabilities — the data and the distribution reach — are directly relevant to the open question in Section IV.

The broker displacement context extends beyond the Cigna-HCSC pool. CircleEngage's pipeline identifies 31 non-commissionable contracts currently operating across SCAN's six states — UnitedHealthcare (9 contracts), Humana (7), Wellcare (6), Aetna Medicare (5), and Wellpoint (4) among them — covering 3.26 million members whose brokers are no longer calling them proactively at renewal. These are not just members without guidance: CircleEngage's analysis of 298 NC contracts found NC plans underperformed commissionable peers by 13–18 percentage points at the median across every size band. No carrier in the analysis replaced the broker channel. The 3.26 million members in SCAN's markets are in plans that are statistically bleeding enrollment relative to their commissionable competitors — and the broker relationships that would retain or redirect them have gone quiet. That is the standing acquisition pool that broker network reach converts.

On the California retention question: CircleEngage's member communication platform is designed specifically for the engagement layer that determines whether a switcher cohort stays — benefit activation, proactive communication in accessible language, and broker follow-through in the first 90 days. The H5425 star drop makes this a more active problem than SCAN may have anticipated when AEP opened.

The competitive context is also shifting in SCAN's favor. A January 2026 survey of MA health plan leaders found 69% expect their benefit packages to be less rich in 2027 — and not one respondent expected richer benefits (HealthScape Advisors, 2026). As plans lose the ability to compete on OTC card size and supplemental generosity, member trust and distribution channel quality become the primary retention levers. Plans that built loyalty through high-touch broker distribution will retain members through the benefit compression cycle. SCAN's nonprofit positioning and all-commissionable strategy are structurally aligned with where the market is moving.

Both organizations are also aligned on how Medicare members should be treated at the point of enrollment decision — as people making a complex financial and medical choice, not as a unit of acquisition. SCAN's all-commissionable plan strategy reflects the same orientation CircleEngage is built around: broker-mediated distribution where the member's interests and the plan's interests align, rather than diverge.