Don’t let your supermarket choose your health plan

Nona Tepper reports for Modern Healthcare on a new health insurer strategy to enroll more Medicare Advantage members. Anthem is partnering with Kroger to offer Medicare Advantage plans in several cities. If you want to be able to see the doctors of your choice without a private health plan second-guessing your doctors, don’t let your supermarket choose your Medicare health plan.

The Medicare Advantage market is growing like a weed. Medicare Advantage plans are sprouting up and more people are inclined to enroll in one of these plans. But, Medicare Advantage plans could be offering little to people with costly and complex conditions and we would not know because so much of what they do is deemed proprietary.

Kroger and Anthem likely both benefit from a partnership. Kroger gets more traffic in its stores and at its pharmacies and additional health care income. Anthem gets to use Kroger supermarkets as a venue for the delivery of primary care services at low cost; it doesn’t have to invest in real estate. Right now the supermarket market is growing at a much slower rate than the Medicare Advantage market.

We don’t yet know the exact form this partnership between Kroger and Anthem will take. It is set to launch in 2022. But, Anthem has 2.7 million subscribers to its Medicare Advantage and Medicare Supplemental insurance products. Kroger has more than 2,300 pharmacies and 200 health clinics.

For sure, Kroger and Anthem will learn a lot more about their customer base from their partnership. Will it improve health for these people and reduce health care costs? The jury is out, but based on the available data to date, the answer is a resounding no.

Will it improve Kroger’s profits, perhaps. With fewer people going to the grocery story given the pandemic, it arguably it has more room in its stores to devote to health care, where profit margins are higher.

Will it reduce Anthem’s marketing costs for new enrollees in its Medicare Advantage plans? Most likely, yes. The average marketing costs for each new member in 2019 was between $500 and $2,300. Even still, Medicare Advantage plans earned an average of $222 a month for each member.

Here’s more from Just Care:

• High proportion of people flee Medicare Advantage at end of life
• Costs in Medicare Advantage present barrier to care
• Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
• Billing fraud pervasive in Medicare Advantage
• Coronavirus: How many Medicare Advantage members went without treatment?