
Healthcare payers like UnitedHealthcare and Anthem have teamed with retail behemoths more frequently lately to offer co-branded Medicare Advantage plans. For seniors to have better access to care and spend less on prescription drugs, these partnerships take advantage of overlapping target audiences and similar purposes. By providing shopping allowances and other savings to consumers, these coalitions also address the social determinants of health. Co-branded Medicare Advantage plans with retail businesses are still uncommon, but they have a great deal of promise to both payers and beneficiaries in the healthcare sector.
Payers including UnitedHealthcare, Priority Health, and Anthem have entered into alliances with retail behemoths to provide co-branded Medicare Advantage plans, marking the emergence of an intriguing trend in the healthcare sector in recent years. What motivates this unusual collaboration, though?
While co-branded Medicare Advantage plans have not been widely prevalent, a handful of major payers and disruptors have adopted this strategy between 2021 and 2023. One such example is Select Health, set to launch its Kroger Health co-branded Medicare Advantage plan in January 2024. In an email interview with HealthPayerIntelligence, Jason Worthen, vice president of government markets at Select Health, delved into the motivations and considerations behind this decision.
1. Overlapping Populations:
A crucial factor in the success of a Medicare Advantage-retail partnership is shared target demographics. Worthen emphasized the importance of this alignment, pointing out that it’s not just about geography but also demographic characteristics. Select Health, serving over a million members across Utah, Nevada, and Idaho, found that their target population overlapped with Kroger’s customer base, which largely consists of Baby Boomers eligible for Medicare. Kroger’s impressive customer loyalty further solidified this alignment, with 87 percent of its consumers returning in 2022. When both entities serve a similar market and enjoy customer loyalty, a co-branded Medicare Advantage plan becomes more appealing and recognizable to potential enrollees.
2. Similar Missions:
Beyond demographics, aligning missions is another key to success. Select Health and Kroger Health both invested considerable time evaluating their missions and found convergence. Both entities share a commitment to addressing health within the community, with Kroger Health focusing on personalized health and wellness solutions and Select Health partnering with consumers to enhance their health affordably. While mission alignment can be a challenge due to the extensive planning and time it demands, it’s an essential component of a successful co-branding endeavor.
3. Consumer Savings:
Retail partnerships offer Medicare Advantage plans a unique opportunity to address social determinants of health more directly, resulting in potential cost savings for consumers. A study by Alignment Healthcare found that around 15 percent of seniors face food insecurity, with many valuing a monthly grocery allowance more than digital health benefits. Food insecurity and economic instability are top social determinants of health barriers for seniors. Partnering with retailers offering affordable healthcare and groceries simplifies access to care and helps alleviate these barriers. Such partnerships expand access to health-promoting services, while also offering savings on groceries and prescription medications, two critical aspects for Medicare Advantage members.
4. Access to Care and Medications:
Retail partnerships also play a role in reducing prescription drug spending among seniors, a pressing issue in healthcare. Many seniors have had to make difficult choices, such as going into debt or skipping doses, to cope with escalating drug costs. To combat this problem, some Kroger Health co-branded Medicare Advantage plans have introduced benefits to reduce out-of-pocket pharmacy expenses and allowances for over-the-counter products. By connecting members with both retail and Medicare Advantage companies, these partnerships aim to improve medication access—a crucial metric for success that Select Health intends to track, along with monitoring community health.
Overall, while co-branded Medicare Advantage plans with retail companies remain relatively uncommon, they hold promise for payers aiming to curb prescription drug spending and enhance access to care for seniors. These partnerships rely on shared demographics, aligned missions, consumer savings, and improved access to medications, all contributing to a potential win-win for both payers and beneficiaries in the ever-evolving healthcare landscape.