Chief Financial Officer at The Cigna Group
Thanks, David. And good morning, everyone. Today, I'll review key aspects of Cigna's fourth quarter 2021 results and I'll provide our outlook for 2022. Key consolidated financial highlights for full year 2021 include adjusted revenue growth of 9% to $174 billion or growth of 12% when adjusting for the sale of the Group Disability and Life business.
Adjusted earnings of $7 billion after-tax and adjusted earnings per share growth of 11% to $20.47. We delivered these results despite an elevated medical care ratio in the quarter, partly driven by COVID-19-related claims. Our enterprise revenue and EPS results were slightly better than our expectations, reflecting the resilience and breadth of our portfolio with particularly strong performance in Evernorth.
Regarding our segments, I'll first comment on Evernorth. Fourth quarter 2021 adjusted revenues grew 15% to $35.1 billion, while adjusted pre-tax earnings grew to $1.6 billion. Evernorth's strong results in the quarter were driven by organic growth, including strong volumes in specialty pharmacy and retail, along with ongoing efforts to improve affordability and deepening of existing relationships.
In the quarter, we also continued to increase the level of strategic investments to support ongoing growth of the Evernorth portfolio, such as our Accredo specialty pharmacy, our virtual care platform and our technology, including digital capabilities. Overall, Evernorth delivered a strong year, focusing on driving value for clients and customers, while achieving strong revenue and earnings growth above its long-term growth targets.
Turning to Cigna Healthcare, which as a reminder, now includes the prior US medical segment plus our retained international health business. Overall, fourth quarter adjusted revenues were $11.2 billion. Adjusted pretax earnings were $472 million and the medical care ratio was 87%. During the fourth quarter, we experienced elevated medical costs, driven in large part by dynamics related to COVID, including higher testing, treatment and vaccine costs.
Specifically, the higher than expected fourth quarter costs are attributable to three primary areas: higher stop loss claims, particularly in policies with lower attachment points that were triggered by the cumulative impact of COVID and non-COVID costs throughout the year; continued pressure, individual business, particularly the special enrollment period customers who were added in mid-2021; and higher claim costs in our commercial insured book. The elevated medical costs were partly offset by better-than-expected net investment income and fee-based specialty contributions, neither of which are reflected in the medical care ratio metric.
For full year 2021, we finished with the medical care ratio of 84%. The unfavorable fourth quarter medical costs informed and sharpened our 2022 assumptions. We now expect full year 2022 medical costs to run above the corresponding 2022 baseline at a relative level that is consistent with full year 2021. This 2022 medical cost outlook is now higher than our previous expectations. And specific to stop loss, we assume the pressure experienced in the fourth quarter will persist in 2022 and we will take appropriate future pricing action as this book of business renews throughout the year.
Helping to offset these pressures, as we step into 2022, are targeted pricing actions we've taken in our US Commercial business as we saw our claim costs emerge in 2021, higher US Commercial enrollment and retention than previously expected in our fee-based business, and incremental affordability actions, which I'll elaborate on in just a few moments.
Turning to membership, we ended the year with 17.1 million total medical customers, an increase of approximately 430,000 customers for the full year. 2021 customer growth was driven by middle markets and select within US Commercial, Individual and Medicare Advantage within US Government and International Health. Overall, Cigna HealthCare supported and delivered for our customers, clients and partners during a challenging year and is well positioned to both grow membership and expand margins in 2022.
Turning to Corporate and Other Operations. The fourth quarter adjusted loss was $115 million and now includes positive earnings contributions from our international life, accident and supplemental benefits businesses held for sale, pending divestiture. As Ralph noted, during the fourth quarter, we've reported a special item charge of $119 million after-tax related to actions to improve our organizational efficiency.
These actions will capitalize on our scale and the progress we have made through automation, increased use of digital tools and continued innovation to better enable us to grow and expand in this dynamic marketplace. Overall, Cigna's 2021 results reflect our balanced portfolio and our commitment to accretive capital deployment to augment our organic growth.
As we turn to 2022, our affordability initiatives, pricing actions and focus on operating efficiencies will drive income growth and margin expansion in Cigna Healthcare. This performance, coupled with continued growth in Evernorth and accretive capital deployment, will drive attractive EPS growth.
For the full year 2022 outlook, I'd like to first remind you that our outlook assumes the divestiture of our international life, accident and supplemental benefits businesses will close in the second quarter of this year. In total for the company, we expect consolidated adjusted revenues of at least $177 billion, representing growth of approximately 4%, excluding the impact from previously announced divestitures.
We expect full year consolidated adjusted income from operations to be at least $6.95 billion or at least $22.40 per share, consistent with our prior EPS commentary. We project an expense ratio in the range of 6.9% to 7.3%, further improving upon our operational efficiency and ensuring continued affordable solutions for our clients and customers. And we expect a consolidated adjusted tax rate in the range of 22% to 22.5%.
I'll now discuss our 2022 outlook for our segments. For Evernorth, we expect full year 2022 adjusted earnings of approximately $6.1 billion. This represents growth of about 5% over 2021, within our targeted long-term income growth range, reflecting strong growth in Accredo's Specialty Pharmacy, all while we continue to increase investments in order to drive new innovative solutions to the market.
For Cigna Healthcare, we expect full year 2022 adjusted earnings of approximately $3.9 billion. This outlook reflects the strength of our value proposition and focused execution in our business, driven by organic customer growth and disciplined pricing in order to expand margin.
Some key assumptions reflected in our Cigna Healthcare earnings outlook for 2022 include the following. Regarding total medical customers, we expect a 2022 growth of at least 575,000 customers, with the vast majority coming from an increase in US Commercial fee-based customers. Within our US Commercial book, organic customer growth is driven by national, middle market and select market segments. We expect Medicare Advantage customers to be relatively flat compared to 2021, reflecting the competitive backdrop. And as David shared, we expect a decrease in our individual customers.
We expect the 2022 medical care ratio to be in the range of 82% to 83.5%. As I noted earlier, this outlook assumes total medical costs will be above baseline in 2022. Importantly, we are actively managing overall medical costs with a range of affordability actions, including identifying opportunities such as guiding customers to more effective and efficient sites of care. For example, we've focused our eviCore subsidiary on incorporating a site of care review to our existing processes.
These improvements encourage the use of non-hospital settings, which can substantially reduce the costs for customers, while increasing patient satisfaction. This action has contributed to results within our commercial book of business, where we are now seeing fewer than 20% of all knee and hip replacements occur in an inpatient hospital setting, down from over 75% in 2019.
We are also continuing to promote preventive care, the targeted use of virtual care through our MDLIVE subsidiary, and access to behavioral services to provide meaningful support to patients and moderate overall medical costs over the longer term. Through these affordability initiatives and our disciplined pricing actions, we expect to expand margins in 2022 while growing our medical customer base.
Now, moving to our capital management position and outlook. We expect our businesses to continue to drive strong cash flows and returns on capital, even as we increase strategic reinvestment to support long-term growth and innovation. In 2021, we finished the year with $7.2 billion of cash flow from operations. Additionally, we returned over $9 billion to shareholders via dividends and share repurchase in 2021, a significant increase from 2020.
And now, turning to our capital outlook for 2022. We expect at least $8.25 billion of cash flow from operations, up more than $1 billion from 2021, reflecting the strong capital efficiency of our well-performing business. This positions us well to continue creating value through accretive capital deployment, in line with our strategy and priorities. We expect to deploy approximately $1.25 billion to capital expenditures, an increase from our 2021 capex levels. The investments will be heavily focused on technology to drive future growth.
We expect to deploy approximately $1.4 billion to shareholder dividends, reflecting our meaningful quarterly dividend of $1.12 per share, a 12% increase on a per share basis, and we expect to use the proceeds from the divestiture of our international life, accident and supplemental benefits businesses primarily for share repurchase.
Our guidance assumes full year 2022 weighted average shares to be in the range of 308 million to 312 million shares. Year-to-date, as of February 2, 2022, we have repurchased 2.5 million shares for $581 million. 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, our full year 2021 consolidated results reflect strong contributions from our focused growth platforms, led by Evernorth. Our 2022 outlook reflects meaningful contributions from each of our two largest segments, Evernorth and Cigna Healthcare, along with accretive capital deployment.
We are confident in our ability to deliver our 2022 full year adjusted earnings of at least $22.40 per share, consistent with our prior EPS commentary. Finally, as Ralph noted, we are looking forward to speaking with you in more detail at our upcoming Investor Day in June.
And with that, we'll turn it over to the operator for the Q&A portion of the call.