A variety of traditional and non-traditional investors are starting to capitalize on the stability of the Medicare Advantage Program and expansion of the Medicare Advantage Health Plan Market.  These companies are leveraging sophisticated technological interfaces, data, and telemedicine to help improve the patient experience and to maximize the Triple Aim.

Why Medicare Advantage?

Medicare Advantage plans are offered by private insurance companies subject to certain standards established by the Centers for Medicare & Medicaid Services (“CMS”).  While the Medicare Advantage health plans are responsible for meeting specified levels of benefits and service standards and receive premium funding from the government, they have a high degree of autonomy on how they administer the plans to cover enrolled Medicare beneficiaries.  Medicare Advantage funding is risk adjusted for the health status of the enrollee and as a result, effective Medicare Advantage plans (“MA Plans”) are highly dependent upon real time data sharing.

Disfavored no more

Recent developments show that Medicare Advantage has more bipartisan support than the ACA Marketplace and is less susceptible to political intrigues.  However, this was not always the case. Not too long ago, Medicare Advantage was considered a “privatization of Medicare” and insurance companies were accused of making a profit off of the Medicare Program.  In February 2013, federal officials announced a 2.2% cut to Medicare Advantage reimbursement.  The political attacks on Medicare Advantage were not well received by the Medicare Advantage enrolled seniors who vocally began to defend their beleaguered program.  The patients began a campaign of communication to members of Congress, touting the benefits of engaged Medicare Advantage healthcare providers and health related initiatives such as fitness and nutrition counseling.  This caught the skeptics between a rock and a hard place.  Some Congressional Democrats have noted that they support killing the program but cannot because senior constituents love it.  After significant grassroots lobbying, coalition building, and industry efforts, the proposed 2.2% reduction was transformed into a minor increase by April 2013.  This turnaround was primarily due to patient and provider advocacy with thousands of seniors participating in letter writing campaigns to protect their Medicare Advantage Program.  Medicare Advantage went from a political pariah to a bipartisan tolerated program within a few years.

Medicare Advantage is here to stay

Fast forward to 2018, Medicare Advantage is marketed as an innovative health care option that will provide more choices and lower premiums.  The Trump Administration is providing greater flexibility to companies offering benefits in Medicare Advantage plans.  Medicare Advantage is expanding beyond the retiree states of Florida, Arizona, and California with significant inroads in all fifty states.  The growth has caught the eye of innovative healthcare investors and market consolidation has produced larger plans with stronger infrastructure including captive staff-model delivery systems.  Medicare Advantage continues to grow with 33% of Medicare eligible beneficiaries currently enrolled in MA Plans.  Significant opportunities exist for companies which already possess sophisticated data analytics and coordinated care systems.  Notably, one such player, Clover Health, announced on August 27, 2018 that it is also launching Medicare Advantage plans in six new markets in 2019.  Clover Health is a San Francisco based startup that uses data analytics and artificial intelligence to deliver health care.  Currently, Clover Health provides services for 30,000 seniors and others eligible for Medicare in parts of Georgia, New Jersey, Pennsylvania and Texas.  Only time will tell how successful starts ups such as Clover Health will be in the Medicare Advantage marketplace.  However, this investment is one indicator that despite the rhetoric around health care in America, Medicare Advantage is here to stay.

Back to Health Law Advisor Blog

Search This Blog

Blog Editors

Authors

Related Services

Topics

Archives

Jump to Page

Subscribe

Sign up to receive an email notification when new Health Law Advisor posts are published:

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.