According to Chartis, startup plans in Medicare Advantage grew by 21.7% from 2022 to 2023, with Devoted Health leading the way. Accounting for 1.8% of all Medicare Advantage enrollment, or around 560,000 members, Devoted Health added 59,000 new members in 2023, a growth rate of 88.4%. The startup offers both Medicare Advantage plans and in-home healthcare, and has been gaining traction in the “provider” market, which combines insurance and healthcare services under one entity. The growth of startup plans could potentially offer more affordable and innovative options for seniors and disabled individuals.
Medicare Advantage (MA) plans, which provide health insurance to over 24 million seniors and disabled individuals, are seeing significant growth in the startup plan sector. According to an analysis from Chartis, a healthcare research firm, startup plans grew by 21.7 percent from 2022 to 2023, with Devoted Health leading the way as the fastest-growing startup.
In 2023, startup plans will account for 1.8 percent of all Medicare Advantage enrollment, or around 560,000 members. Devoted Health, a “provider” that offers both Medicare Advantage plans and in-home healthcare, accounted for 59,000 of the 100,000 new startup plan members in 2023. This represents an 88.4 percent growth rate for the company, which was founded in 2017.
Other large startup plans also saw growth in 2023. Bright Health, the eighth largest Medicare Advantage provider, added 11,000 new members for 2023, representing an 8.3 percent growth rate. However, the company has faced several financial challenges in recent years and has withdrawn its Medicare Advantage offerings from every market except California for 2023.
Alignment Healthcare, another startup plan, added 18,000 new members for 2023, representing a growth rate of 20.5 percent. The company has 109,000 members for 2023.
While startup plans still account for a relatively small portion of overall Medicare Advantage enrollment, their rapid growth is notable. These plans often offer innovative benefits and services, such as in-home healthcare, that traditional Medicare Advantage plans may not provide. Additionally, startup plans may be able to offer more competitive pricing due to their lower overhead costs compared to larger insurance companies.
Devoted Health’s growth in particular is impressive, given the company’s relatively short history. The “provider” model, which combines insurance and healthcare services under one entity, has been gaining traction in recent years and could be a key driver of growth for Devoted Health and other similar startups.
Overall, the growth of startup plans in the Medicare Advantage market is worth watching, as these companies could disrupt the industry and potentially offer more affordable and innovative options for seniors and disabled individuals.
