Medicare Advantage (MA) plans are becoming more important payers for home health, as they have shown a steady climb in beneficiaries over the past decade. New opportunities are also arising for MA plans to cover non-skilled in-home care.
There could soon be another MA player on the scene—one backed by Google parent company Alphabet Inc. (Nasdaq: GOOGL).
New York City-based Oscar Health announced Tuesday that Alphabet Inc. plans to invest $375 million into the technology-driven health care business. Eventually, Oscar Health hopes to use the funding to propel it into the MA market, CEO Mario Schlosser said in a statement provided to Home Health Care News.
“Oscar will accelerate the pursuit of its mission: to make our health care system work for consumers,” Schlosser, who co-founded Oscar Health in 2012, said. “We will continue to build a member experience that lowers costs and improves care, and to bring Oscar to more people—deepening our expansion into the individual and small-business markets while entering a new business segment, Medicare Advantage, in 2020.”
Since the Affordable Care Act was passed in 2010, MA enrollment has grown by more than 70%, according to the Kaiser Family Foundation. As of last year, about one in three Medicare beneficiaries—about 19 million beneficiaries in total—were enrolled in MA plans.
MA opportunities are starting to emerge for home care and hospice providers as well, meaning an Alphabet-backed Oscar Health could be one more launching pad into home health care for Google.
In spring, the Centers for Medicare & Medicaid Services (CMS) announced that non-skilled in-home care services will be allowed as a supplemental benefit for MA plans come 2019. The way the MA program is set up is currently fragmented for end-of-life care, but policymakers and industry stakeholders are aggressively pushing to change that.
Beyond the newly announced investment, Oscar Health and Alphabet do not have any deeper ties at this point, Schlosser told the magazine Wired.
Oscar Health may have its sights set on MA, but statistics suggest that’s a tough market to enter—and one dominated by just a handful of key players.
In 17 states, one company accounts for more than half of all MA enrollment, according to Kaiser Family Foundation.
Additionally, Oscar Health’s future competitors in the market include UnitedHealthcare and Humana (NYSE: HUM), which combined to account for about 40% of MA enrollment in 2017. Competitors also include insurance giants Aetna (NYSE: AET) and Cigna (NYSE: CI), with several other prominent companies eyeing MA expansions.
Given its ownership stake in Kindred at Home, Humana, in particular, has an upper hand in respect to home care opportunities and MA plans.
Oscar Health does have some features that would seem to support aging-in-place for a Medicare Advantage population, such as dedicated care teams assigned to each beneficiary and on-demand physician phone calls.
So far, Oscar Health has been more widely known for its expansion into the individual insurance business under Obamacare. To date, the company has raised at least $1.3 billion in funding, according to investment tracker Crunchbase.
Written by Robert Holly