Venture- and private equity-backed startups like Oscar Health, Clover Health, Devoted Health, Alignment Healthcare and Bright Health have raised hundreds of millions as they’ve expanded their reach into the competitive Medicare Advantage markets.
Business Insider rounded up how each insurer fared during its enrollment period going into 2020, based on government filings and other data.
The insurers’ footholds are growing, though none have cracked 100,000 members in the Medicare Advantage market.
Click here for more BI Prime stories.
2020 is shaping up to be a pivotal year for health insurance startups trying to gain footholds in a red-hot market.
Competition for the 22 million Americans enrolled in Medicare Advantage plans, and the thousands signing up daily as they turn 65, is fierce. The startups — Oscar Health, Devoted Health, Bright Health, Clover Health, and Alignment Healthcare — are going up against giants in the industry.
UnitedHealthcare for instance, had nearly 5.3 million members enrolled in Medicare Advantage plans at the end of 2019, while Humana had 3.6 million, and Aetna had 2.3 million.
The startups are betting that new models built with better technology could help them provide better care to their members. To prove that, the startups have raised billions.
Never miss out on healthcare news. Subscribe to Dispensed, our weekly newsletter on pharma, biotech, and healthcare.
The startups have raised billions to take on entrenched health insurers
Bright Health, a Minneapolis startup that provides individual and Medicare Advantage plans, in December raised a monster $635 million round, topping the $500 million round Clover Health raised in January 2019.
In August 2018, Oscar Health raised $375 million from Alphabet to gear up to get into the Medicare Advantage market. Devoted Health in October 2018 raised $300 million ahead of launching its first Medicare Advantage plans in Florida.
In total, the venture-backed startups have raised $3.6 billion, while private-equity-backed Alignment has raised more than $200 million. Alignment’s owners include General Atlantic and Warburg Pincus.
Here’s a look at the number of members the startups have going into 2020. They suggest the footholds are growing and give a sense of the financial results the companies can expect from the market in 2020. The government pays insurers roughly $10,000 a year to finance care for each Medicare Advantage member.
It’s the first year Oscar has offered health plans through the Medicare Advantage market. A spokeswoman for Oscar noted that the enrollment was in line with Oscar’s targets.
Bright Health’s numbers benefit from a planned takeover
“We have taken a disciplined approach to entering Medicare Advantage, selecting three markets for 2020,” the spokeswoman said. “In the Bronx, as an example, our focused strategy was successful, resulting in the business capturing 7% market share of assumed shoppers.”
Bright’s numbers are affected by plans to acquire a Medicare Advantage-focused plan called Brand New Day that would dramatically increase its presence in the private senior market.
As of January 2020, Brand New Day had a little over 45,000 members, Jeff Davis, CEO of Brand New Day, told Business Insider …read more
Source:: Business Insider