Health Affairs February 27, 2023
In the past decade, investors have eagerly embraced startup companies focused on the Medicare Advantage (MA) market, the health insurance program funded by the Centers for Medicare and Medicaid Services (CMS). The top 10 MA startup companies have received more than $20 billion in venture funding (exhibit 1). Understandably, the MA market is attractive to entrepreneurs and investors: CMS spent more than $427 billion on the program in 2022, which accounted for 55 percent of total federal Medicare spending. MA enrollment has also doubled in the past decade, and startups have only captured a small fraction of those covered lives, representing a large opportunity to gain market share.
At the same time, startups focused on Medicaid populations received only a...
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