Medicare Advantage Is Booming. Why Are So Few Payers Winning?

It’s a vast market—projected to reach more than $360 billion a year by 2023—with attractive growth baked in. Below the surface, though, lie difficult dynamics and increasingly tough competition. Medicare Advantage—the insurance programs that private companies offer through Medicare—has established itself as a hot market segment that shows no signs of cooling, and lots of health care payers are eyeing it. But they should look carefully before they leap. Large incumbents such as United Health, Humana, CVS Aetna, and Anthem, along with powerful regional players such as WellCare, have built strong defenses. New entrants must develop a compelling value case if they are to gain a foothold, much less seize significant share. Here’s what companies...