Trends Report

Medicare Advantage Will Provide Long-Term Revenue Growth For Health Insurers, But They Must Win Market Share Today

October 31st, 2019

Summary

As growth opportunities in commercial markets decline, health insurers are racing to diversify revenue streams; government markets are emerging as the best options for balanced, future-proof growth strategies. Medicare Advantage is the most profitable segment of the government market, and growth opportunity in this market is widespread: 66% of eligible beneficiaries still receive their health benefits from the federally administered Medicare program. Market leaders are already distancing themselves from the pack — health insurers must act now to capture members, as unseating market leaders in the future will be difficult. Growing membership in this market requires an entirely different strategy than in commercial markets: Consumers have a highly simplified online shopping experience that favors highly rated plans, and plan differentiation is based on reduced premium and deductible costs, rather than expansive benefits.

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