Healthfirst and Highmark

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Health Insurance Overview: Business Environment

The focus of this research was to report a high-level overview of the US health insurance industry's business environment in the past year. Our research indicated that much of the information was readily available about the business statistics related to the health insurance industry, however, no information was available about how the Health Insurance Business Environment changed in the past year. The information available on the market changes in the past 6-12 months, was largely centered around issues associated with the pandemic. In this document, we covered internal and external issues faced by healthcare insurance providers, and overview of market changes in the past 6 months, in context with business growth and regulations.

Health Insurance Industry Internal Issues (in 2020):

According to research by PwC, some potential internal issues faced by health insurance industry are listed below:
1. Managing physical office spaces: During the pandemic, a limited workforce will be allowed to seek access to physical facilities to avoid contagious spread. Some employees might not have appropriate physical environments for remote work, or some employees might lack supervision and review processes and might feel challenged to work elsewhere.
2. Communications: The insurance industry workers might face a communications issue. The way the company responds to the pandemic, such as shifting the work environment and managing employee's health and safety concerns, might determine if the company faces reputational or litigation risks.
3. Cybersecurity: While most of the labor force is working remotely using their home-based internet, which is vulnerable to cyberattacks. The Data Security Regulatory Reform, the California Consumer Privacy Act of 2018 (CCPA) dictates that the Insurers must take cybersecurity measures to maintain data privacy. In the case of data breaches, the healthcare information of clients could be exposed and might raise concerns over various lawsuits or monetary compensation.
4. Managing spikes in service requests: Due to increased hospitalizations due to COVID, and most healthcare facilities operating at full capacity might spur growth in claims requests.
5. Third-party service providers: The IT and other support services may hamper because of internal challenges or vendor problems. Increased claims requests might lead to an increase in web and phone traffic, creating operational constraints or disruptions
6. Other challenges: Finance and liquidity issues, Tax and trade challenges, managing Strategy, and Brand. Refer to PwC's article for further reading.
7. Lacking Digital Skills: Within the insurance industry labor force, people with both digital skills and core skills are in short supply. According to the 2019 PwC survey, 81% of workers in the insurance industry reported that they were somewhat or very concerned about the availability of key digital skills.
8. Managing Workforce: In the insurance industry, nearly 12% of insurers underwent mandatory furloughs, while 42% of insurers went on a hiring freeze or reduced staff in some capacity. According to ZipRecruiter data, remote-based jobs such as Insurance claims adjuster, Medicare Insurance Specialist, Insurance Agent jobs have increased by 212%, 68%, and 71% respectively.

External Issues - Financial Risks facing Health Insurers:

  • The pandemic has created a misalignment of claims paid and premiums collected. Due to rising unemployment, the number of uninsured Americans has also risen dramatically, which adversely affects premium collection. This might impact the insurer’s reserve balances to finance their claim payments.
  • Additionally, some members might delay care while their health is deteriorating, which will eventually increase the claims than originally estimated at the initial stages of the disease.
  • Premium deficiency reserves will be utilized when the unearned premium reserve is insufficient to cover future expected expenses.
  • During the pandemic, employers and individuals seeking a certain health insurance program might delay premium payments to conserve cash.
  • In addition, uncertainty in the volatile job market which has led to mass layoffs and furloughs has decreased the demand for health insurance, which negatively affects the premium volume.
  • Health carrier actions have been aimed at providing relief to customers due to treatment disruptions related to COVID-19. That relief has come in the form of premium credits and refunds, cost-sharing waivers, and extended premium payment windows of 31 to 60 days.
  • There is still cost uncertainty regarding emerging diagnostics and treatments related to COVID-19, such as the cost of antibody tests, treatment therapies, and vaccines.
  • In addition, the cost of testing is also uncertain, because it is still not clear whether insurers are required to cover the cost due to public health, or occupational safety reasons. This factor would be important in determining the increase in health insurance premiums in 2021.
  • A lot of uncertainties and unknown factors around the treatment of COVID-19 has led to difficulties in the premium rate calculation for 2021.
  • Factors such as (i) long-term effects of COVID-19, (ii) upcoming waves of COVID infections, and (iii) changes in patterns of prescription drug spending, shall be decisive in determining the premium rates for the next year.

Market Changes in the Past six months - Business & Regulations:

  • During the pandemic in 2020, there has been a sharp decline in elective care, which has dramatically reduced health care expenditures and soared profitable earnings for the health insurance companies.
    • During the pandemic, insurers have received fewer medical claims, because expensive, and elective surgeries have been postponed in many places. Moreover, people do not seek routine doctor visits and avoid emergency room in fear of contagion.
    • Some of the largest health care insurance companies such as Anthem, Humana, and United Health Group, have reported nearly doubled earnings in the second quarter (in 2020), compared to 2019.
    • The United Health Group’s net income during the second quarter grew from $3.4 billion (in 2019) to $6.7 billion in 2020
    • Anthem Inc’s net income during the second quarter increased from $1.1 billion (in 2019) to $2.3 billion (in 2020).
    • Humana Inc's net income during the second quarter increased from $0.94 billion (in 2019) to $1.8 billion (in 2020)
    • CVS Health, which owns Aetna Insurance, reported a $1 billion increase in the net income during the second quarter (in 2020) when compared with the net income during the second quarter in 2019.
  • The insurance provider profits are capped under the Affordable Care Act. This legislature enables insurance companies to invest 80-85% of their revenue on medical care and health care quality improvement, leaving the remaining 20-15% for the company's profits. Any additional revenues are to be returned to consumers in the form of rebates.
      • The Health and Human Services (HHS) Department advised health insurance companies to consider rebates, and reduce premiums, to help consumers navigate through the financial crisis.
      • The government has mandated that the testing and treatment for coronavirus, and paying for telemedicine visits, should be covered by the insurer.

Additional Content:

- Additional Reading about recommendations by Aetna, regarding a healthy workplace and workforce environment can be accessed here.
- Additional Reading about the regulatory requirements for Insurers in the USA, can be accessed here.
- Podcast on the Impact of COVID-19 on the Health Insurance Industry, can be freely accessed here.

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Health Insurance Overview: Competitive Environment

The health insurance market in the United States is highly concentrated based on the market share of the leading insurers in the metropolitan statistical areas (MSAs) of the country. Some companies enter into merger and acquisition strategies to expand into new markets and build key capabilities to have a competitive advantage.

Market Concentration

  • The examination of the market concentration was done by the US Department of Justice (DOJ) and the Federal Trade Commission (FTC). They have examined 384 metropolitan statistical areas (MSAs) in the US on its 50 states and the District of Columbia.
  • In 2019, the average HHI across all the MSA-level markets was 3,473.
  • About 56% of them experienced an increased HHI from 2014 to 2019, having an average increase of 481 points.
  • It was also reported that in almost every state and a significant number of MSA, the people's choice of an insurer in the health insurance market has become more limited over the years. This is due to the increasing consolidation in the private health industry.
  • Being highly concentrated, it alarms policy analysts and payers because of the market power it can give to insurers.
  • Economists note that having less competition can result in an increase in the insurers' premiums.

Biggest Companies in the Industry

  • Based on the industry report published by IBIS World, the companies with the largest market share in the health insurance industry in the US include UnitedHealth Group Inc., CVS Health Corporation, Anthem Inc., Humana Inc., and Cigna Corporation.
  • The top 4 companies account for approximately 64.2% market share of the total health insurance market in the US.
  • The industry currently has a market size of $1 trillion, with an average growth of 2.9% between 2015 and 2020.

States with the Least Competitive Markets and Their Market Share

  • In 2019, the ten states with the least competitive commercial health insurance markets are Alabama, Hawaii, Michigan, Delaware, South Carolina, Kentucky, Alaska, Louisiana, Illinois, and North Carolina.
  • In the same year, the ten states with the least competitive exchanges are Alaska, Delaware, Mississippi, Nebraska, Wyoming, South Carolina, Alabama, Oklahoma, North Carolina, and Iowa.
  • When measuring the market share of the largest health insurers per state, the largest insurer in Alabama tops the list having 86% of the market share in the state.
  • This market share ranking was followed by the largest insurer in Michigan (67%), Hawaii (66%), South Carolina (64%), and Delaware (64%).

Mergers and Acquisitions (M&A) Activity

  • Mergers and Acquisitions are strategic ways on how companies can make faster progress as it enables them to expand into new markets and build key capabilities.
  • Having weak economies are considered a good time for M&A. A BCG research found that a weak economy can lead to better value creation or up to 9 percentage points in shareholder return.
  • M&A activities in the health insurance industry can lead to the companies' exercise of market power which can possibly harm the providers and the consumers of care.
  • Instead of passing the benefits to consumers, having this market power gives the health insurers the ability to maintain or raise premiums above its competitive levels.
  • The research published by AMA found that health insurers benefit from their market power by increasing the number of their geographic market.

Innovations in the Health Insurance Space

  • Anthem, being the second-largest health insurer in the US when it comes to membership, partnered with Samsung Electronics America and a telehealth provider named American Well.
  • It has expanded its health plan members' access to virtual doctor visits 24 hours a day, as well as other non-emergency healthcare.
  • Within Anthem, health plan members can access the "LiveHealth Online", powered by American Well's technology.
  • It allows its members to have a consultation with a healthcare provider through video chat.
  • This telehealth service benefits Americans, especially the senior citizens, as it makes healthcare more convenient and members can avoid unnecessary and costly trips to the emergency room or to an expensive physician's office.
  • The chairman and CEO of American Well stated that this collaboration can create a "streamlined patient experience without compromising on care quality, choice, affordability and convenience".

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COVID and the US Health Insurance Industry, Part 1

COVID-19 has significantly impacted the U.S. health insurance industry. The slowing of claims has produced a cash reserve for most health insurers, though others are negatively affected by the loss of premium collection prompted by job loss. Those with a large cash reserve will not be able to preserve it beyond 2020 due to ACA requirements. The unknown types of treatment and testing that will be utilized in the future has produced uncertainty for insurers in terms of how rates should change; as a result, rates for 2021 are fluctuating by region and by plan. 26 million Americans have lost their insurance through their employer and are expected to seek insurance via the ACA marketplace or Medicaid (if they live in a state where it was expanded). Relative to the rest of the world, health insurers in the U.S. are expected to see significant revenue in the next few years due to favorable conditions.

Impact of COVID-19 on U.S. Health Insurance Companies

Projected Impact of COVID-19 Looking Ahead

  • The ACA requires health insurers to spend either 80 or 85 percent of their premiums on health care services, or to furnish the remainder to customers as a tax-free rebate if it does not reach this target by the end of the year. In other words, the reserves of cash built up by the lack of claims will not remain intact for most insurers.
  • COVID-19 is making it difficult to calculate premium rates for 2021 due to the lack of consistency in occurrence across regions and the imbalanced impact on different health plans (due to serving different populations). This has caused ongoing issues with the rate development process for 2021 and potentially subsequent years if the pandemic continues to surge and fall.
  • Rate changes for 2021 range from a 42 percent decrease to a 25.6 percent increase; half of the changes are between a more modest 3.5 percent decrease and a 4.6 percent increase.
  • Of the 26 million Americans who have lost their insurance through their employer, most are expected to lose their insurance (especially if their state has not expanded Medicaid). They may seek COBRA coverage or subsidized insurance through the ACA (or Medicaid if they are in an eligible state). 79 percent of those who have lost their jobs are anticipated to qualify for subsidized insurance or Medicaid.
  • The pandemic has caused 41 percent of Americans to delay health care for non-COVID-19 illnesses and chronic conditions. Due to this, some of these health conditions are worsening and will produce higher future claims (potentially higher than health insurance companies are anticipating).
  • The cost of treatment for COVID-19 in 2021 is unknown as the treatments are likely to evolve and improve, which could increase premiums. Similarly, the cost of testing is unknown as new methods are likely to be developed. If insurers are required to cover testing, health insurance premiums will increase in 2021 and moving forward.
  • As part of North America, the U.S. is anticipated to see the most favorable outcome for health insurance revenue in future years due to "favorable health reimbursement policies, high cost of medical products, and provision for mandatory health insurance of the employees."
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COVID and the US Health Insurance Industry, Part 2

Virtual visits for urgent care needs like allergies and seasonal flu are now available 24/7 as UnitedHealth expands their telehealth product offering. Cigna uses the Coronavirus (COVID-19) Resource Center on its official website to share wellness, mental health and behavioral resources, helping patients and caregivers to navigate these uncertain times. In a recent news release, Centene announced new efforts to help support their Medicare Advantage members beyond eliminating out-of-pocket costs for their COVID-19 treatment.

Case Study #1: UnitedHealth

  • To make a meaningful difference in the fight against COVID-19, UnitedHealth Group is prioritizing strong member support by serving vulnerable populations and providing safety to caregivers.
  • UnitedHealth issued a press release in May 2020 announcing $1.5 billion in additional support to help cushion their customers from COVID-19 challenges. Part of this fund has been used to waive all cost-sharing for COVID-19 diagnosis and treatment.
  • Virtual visits for urgent care needs like allergies and seasonal flu are now available 24/7 as UnitedHealth expands their telehealth product offering. At the start of the pandemic, UnitedHealth rescheduled 4,000 appointments to virtual visits, helping them to ramp up remote monitoring for at-risk patients.
  • By collaborating with different nonprofits, UnitedHealth is providing cover to uninsured individuals affected by COVID-19 and seniors experiencing social isolation coupled with food insecurity.
  • In a bid to increase access to coverage, UnitedHealth offered a one-time special enrollment period between March and April 2020. This allowed fully insured and self-funded customers to get coverage for their healthcare needs during a pandemic without the hassle of strict administrative requirements.
  • Additionally, UnitedHealth is offering a tailor-made COBRA cover to help support customers who have lost their job or gone on compulsory leave as a result of the pandemic.
  • In 2019, UnitedHealth acquired Vivify Health which is now being used to monitor older and immuno-compromised patients who don't want to risk infection by visiting a hospital.
  • United's new online tool helps patients locate COVID-19 diagnostic testing centers near them, while their symptom checker allows users to review symptoms quickly, providing a guide on appropriate next steps if care is needed.

Case Study #2: Cigna Health

  • Cigna uses the Coronavirus (COVID-19) Resource Center on its official website to share wellness, mental health and behavioral resources, helping patients and caregivers to navigate these uncertain times.
  • The Brave of Heart Fund, a partnership between New York Life and Cigna, was launched to provide financial support to the dependents of a caregiver in case one succumbs to COVID-19 in the line of duty.
  • Cigna allows members to connect with doctors and nurses virtually using a phone or computer, bypassing the need to visit an actual facility. This includes remotely evaluating your risk for the Coronavirus using an interactive tool if you're experiencing symptoms.
  • In April 2020, Cigna was making an effort to increase the capacity for its virtual care program. This involved deploying hundreds of new caregivers to join their existing team of healthcare professionals providing round-the-clock care at MDLIVE.
  • Patients have 24/7 access to the online pharmacy and enjoy free standard shipping for prescribed medications.
  • In a recent news publication, heath insurers Cigna and Humana announced that they were now waiving patient cost-sharing on COVID-19 testing and all related costs, including hospitalization and ambulance transfers. “We’re taking this significant action to help ease the burden on seniors and others who are struggling right now. No American should be concerned about the cost of care when being treated for coronavirus,” said Bruce Broussard, president and CEO of Humana.

Case Study #3: Centene Corporation

  • Centene and Quartet Health expanded their existing partnership in July 2020 to provide patients with easy access to behavioral healthcare.
  • A consumer health survey focusing on the effects of the COVID-19 pandemic revealed that two-thirds of Americans reported feeling anxious or depressed during this period, leading to a rapid rise in behavioral health care needs. This partnership aims to leverage locally-based caregivers, allowing members to get treated quickly in a comfortable setting of their choosing.
  • Founded on the firm belief that every individual deserves access to proper healthcare, Centene has teamed up with Samsung, bringing virtual care options to underserved communities across the United States. This initiative aims to equip service providers and patients with smartphones or tablets to help in conducting telehealth visits.
  • In a recent news release, Centene announced new efforts to help support their Medicare Advantage members beyond eliminating out-of-pocket costs for their COVID-19 treatment.
  • The company announced it would also waive in-network care costs for all primary care visits, including the cost of outpatient behavioral health visits for the remaining part of 2020.
  • WellCare, a care provider affiliated with Centene, provides a toll-free helpline on their website for quick communication with customers. Since the beginning of the pandemic, WellCare has fielded almost 3,000 calls from Medicare members needing healthcare services from food assistance to medication.

Research Strategy

To find examples of health insurance companies that have quickly adapted to the changing needs brought about by the COVID-19 pandemic, we first scoured news publications, articles, and industry reports for a list of top health Insurance companies operating in the United States. Following a deep dive of all the health insurance companies listed to understand their COVID-19 response, we found that UnitedHealth, Cigna Health, and Centene corporation are three companies with new tools, programs and insurance covers to ensure members have access to proper healthcare during this pandemic.
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The Election and the US Health Insurance Industry

If Biden wins the election with the Democrats controlling the house, he plans to provide a public, government-run health insurance for all Americans. If Trump wins the election, he plans to replace the Affordable Care Act, however, he has not publicly shared a plan of action to achieve this. Due to the uncertainty of health insurance due to COVID-19, the lack of a plan from Trump, and the fact that Biden's plan rests heavily on the support of the House, there are no statements from experts regarding how customers will shop for health insurance, though one source did state that most healthy Americans want to keep employer-provided plans. To determine that this data does not exist, we scoured news and media publications, expert databases, and industry research, none of which provided insights into customer shopping habits and some stating that the outcome has to many variable to predict customer behaviors. Details of our findings have been provided below.

Biden Outcome Industry

  • Biden plans to provide a public government-run health insurance "like Medicare" that will not have any participation from private companies. This insurance plan would provide the insurance to all Americans. The public insurance would likely only go through if Congress is Democratic-run.
  • In addition, Biden suggests that the government pay to continue Cobra health insurance for individuals who lost their jobs due to the COVID-19 pandemic.
  • Biden supports the Affordable Care Act and experts do not expect that he will make many, if any, changes to it.
  • In addition to the public insurance plan, Biden's plan includes action to "supply-side challenges drop costs and make health care more affordable within its current framework." One of the biggest focuses of this plan is supply-side challenges.
  • Experts say that the implementation of this plan rests more on how the control of the House ends up with the likely-hood of the plan passing as Biden has laid out only if the Democrats control the House.

Trump Outcome Industry

  • The Trump administration never released an actual plan for health insurance, however, according to the 2021 fiscal budget, they will be addressing the following issues in 2021 if Trump wins the election: "lowering drug costs, ending surprise medical bills, protecting individuals with pre-existing conditions, reducing regulations, improving the transparency of health care costs, and increasing competition."
  • Trump has created a replacement for the Affordable Care Act (ACA), however, there is no plan in place that describes how this will be implemented. Experts say that if Trump wins the election, Republicans will have all of 2022 to replace the ACA.

Consumer Insights

  • In 2019, the consumer health insurance shopping ACA Marketplace had the following statistics:
    • 18% of Americans shopped for health insurance in 2019.
    • 26% of Americans that shopped for health insurance obtained it through the marketplace.
    • 26% of Americans that shopped for health insurance obtained it through their employer.
    • 18% of Americans that shopped for health insurance obtained it through medicaid.
    • 18% Americans that shopped for health insurance did not obtain any health insurance through the marketplace or medicaid.
    • 12% Americans that shopped for health insurance obtained health insurance from another source.
  • The reasons for Americans not obtaining marketplace insurance in 2019 were as follows:
    • 51% could not find an affordable option.
    • 26% obtained insurance through a different source.
    • 4% decided they did not need insurance.
    • 18% had "some other reason."
  • 68% of customers support expanding Medicaid in states that have not done so.
  • Customer views on replacing private insurance with a Medicaid-like option:
    • 27% strongly or somewhat support.
    • 32% strongly or somewhat oppose.
    • 40% don't know or need more information.
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Health Insurance Trade Associations

There is a limited number of professional trade associations in the US health insurance industry publicly available. We were able to identify three associations of this type that operate at a national level: America's Health Insurance Plans, the National Alliance of Life Companies, and the National Association of Health Underwriters. At a regional or state level, we identified four associations in California, New York, and Texas that were not chapters of the National Association of Health Underwriters, which operates in many states and cities across the US.

National Associations

National Association of Health Underwriters

  • This association represents health insurance agents and brokers who work to obtain insurance for clients (employers and people in general) who want to purchase high-quality health coverage.
  • This was chosen as one of the top associations because it is one of the few organizations of this type. It currently has over 100,000 members across the US through over 200 chapters.

America's Health Insurance Plans

  • America’s Health Insurance Plans (AHIP) is a national trade association that represents the "health insurance community." Its members provide health benefits through "employer-sponsored coverage, the individual insurance market, and public programs." The association supports public policies that help to provide access to "affordable health care coverage to all Americans."
  • This was chosen as one of the top associations because it is one of the few organizations of this type. It currently has over 100 members.

National Alliance of Life Companies

  • This is a national trade association of "small and mid-sized life and health insurance companies." It was founded in 1992 to represent the interests of smaller companies. The association works to promote "fair and effective regulation" within the industry.
  • This was chosen as one of the top associations because it is one of the few organizations of this type. It currently has over 50 members.

Regional Associations

Association of California Life and Health Insurance Companies

  • This association aims to "advance the interests and well-being of the life and health insurance industry before legislative and administrative bodies." It was founded in 1952.
  • This was chosen as one of the top associations because it is one of the few organizations of this type. It currently has 39 members.

New York Health Plan Association

  • New York Health Plan Association (HPA), Inc. promotes the development of managed health care plans in the state of New York. Currently, Its members are licensed managed care plans and prepaid health service plans (PHPs).
  • This was chosen as one of the top associations because it is one of the few organizations of this type. It currently has over 25 members.

Texas Association of Life and Health Insurers

  • This is the trade association for life and health insurers of Texas. It also supports the life and health insurance market to help improve the financial security of the state's citizens.
  • This was chosen as one of the top associations because it is one of the few organizations of this type. It currently has over 50 members.

Texas Association of Health Plans

  • This association represents health insurers, Medicaid plans, and Medicare Advantage plans, among other health care entities in Texas. It also promotes affordable health care for people in Texas.
  • This was chosen as one of the top associations because it is one of the few organizations of this type. It currently has over 20 health plan members.

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Healthfirst is the largest not-for-profit health insurance company in New York. The requested information on Healthfirst has been provided on rows 4-12, column C of the Healthfirst tab in the attached spreadsheet.

Healthfirst's Positioning and Competitive Advantage

  • Healthfirst positions itself as the largest not-for-profit health insurer in New York. It has around 1.5 million members that benefit from its high-quality and affordable healthcare.
  • It is one of New York's providers of Medicare Advantage, Medicaid, Family Health Plus (FHP), Child Health Plus (CHP), value-based payments, group insurance, individual insurance, health plan, health insurance, mental health support, innovation, and Managed Long Term Care (MLTC).
  • The company has a unique hospital-sponsored business model. It allows the organization to reinvest in the not-for-profit and public health care system by means of returning the financial savings from its operational efficiencies and to other hospital sponsors.
  • It has an iOS-compatible app called the Healthfirst New York Mobile App which was created to let Healthfirst's 1.5 million members keep their access to healthcare close at hand.

Strengths and Weaknesses

  • Healthfirst offers top-quality Medicare Advantage, Child Health Plus, Medicaid, and Managed Long Term Care plans.
  • Healthfirst's mobile app can be used by all its members in New York to access in-network care, locate nearby essential services, and view digital member information and benefits.
  • Healthfirst provides its products and services mainly in New York, therefore, its capabilities are limited. In order for the company to grow, it can expand its territories outside New York to help them increase their revenue.


  • Healthfirst's markets itself through its mission evolving in community commitment. It puts its members first by closely working with community leaders and healthcare providers in addressing issues that can impact its members' overall health and well-being.
  • The company sponsors community events. Healthfirst became the official wellness partner of Citi Bike offering its members a "Reduced Fare Bike Share" of $5/month across the communities where they work and live.
  • In 2019, Healthfirst launched its new brand campaign "Good health doesn't just happen, it takes community commitment", reflecting its aim to make it more approachable.
  • This campaign appeared through TV ads, print, social and digital media in the New York metropolitan area, Long Island, and Westchester. Some of its portions will also appear, not just in English, but also in Chinese and Spanish.

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UnitedHealthcare positions itself as Americas's number one Medicare plan provider. We have populated the attached spreadsheet with the requested information on UnitedHealthcare.

Selected Findings

  • UnitedHealthcare positions itself as a provider of health plans for individuals and their families every step of the way.
  • UnitedHealthcare is the largest insurance company in the United States based on market share by direct premiums written in 2019.
  • -According to the company's 2019 annual report, they compete "fundamentally on the quality and value we provide to those we serve, which can include elements such as product and service innovation; use of technology; consumer and provider engagement and satisfaction; sales, marketing and pricing."

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The requested information on EmblemHealth has been provided on rows 4-12, column E of the attached spreadsheet.


  • EmblemHealth is one of the largest not-for-profit health insurers in the United States and houses other companies like ConnectiCare, one of Connecticut's leading health plans; AdvantageCare Physicians, a primary and specialty care practice; and WellSpark, a digital wellness company.
  • EmblemHealth provides services for over 80 million people in New York City and the tri-state area.
  • The healthcare provider leverages social media, print, direct mail, OOH, radio, TV marketing channels to promote its products and services.
  • As a not-for-profit, EmblemHealth reinvests in its organization, members and communities. The company has a "Neigborhood Care" program which provides in-person customer support, access to community resources, and programming to help the entire community learn healthy behaviors. The program is available for members and non-members.
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Empire BCBS

Empire BCBS uses its website, blog, Facebook account, and Twitter page to promote its products. One strength for the company is that it enables its customers to get good care by providing easy access to 90,000 participating doctors and over 160 hospitals. This and more of the requested information has been entered in the attached spreadsheet.

Competitive Advantage

  • According to America’s Health Insurance Plans (AHIP), Empire BCBS’s newly launched Ortho@Home teledentistry and at-home orthodontia program costs up to “60% less than traditional orthodontia and is three times faster.”
  • For most of Empire BCBS’s plans, customers pay zero for health screenings, checkups, flu shots, and other preventive care services.
  • Empire BCBS operates a 24/7 NurseLine that provides customers with free and fast medical advice, any time of the day or night, and in over 170 languages.


  • Empire is the largest insurance provider in New York State, with around four million residents, nearly half the population, and 38,000 businesses, unions, and small employers insured by Empire.
  • Empire BCBS offers its customers access to 90,000 participating doctors and more than 160 hospitals in New York State to make getting care easy.


  • Empire BCBS caters to individuals and businesses in 28 eastern and southeastern counties of New York State. This limits the number of customers it can reach and the revenue it can get. The company should consider expanding into other states and markets in the United States and globally to increase its revenue and better compete with other large health insurance providers.


Marketing Channels for Products

  • Empire BCBS uses its Facebook and Twitter social media pages to promote its products. For example, in September 2020, the company used Twitter to market its new 'Anthem Alexa skill' product that gives customers a "quick and easy access to important information about their health at their command."
  • Empire BCBS also used its Facebook page to promote its Sydney Health App.
  • Also, the company uses its website and blog for marketing its products. For example, Empire BCBS promotes its Sydney Health App on its blog and its LiveHealth Online video chat product on its website.

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Fidelis Care

Fidelis Care positions itself as a nonprofit health insurer situated in New York offering various health insurance coverage, such as Child Health Plus, Essential Plan, Medicaid, Health and Recovery Plan, Managed Long Term Care, and Medicaid Advantage Plus, to New York residents. More details on Fidelis Care have been entered in column G of the attached spreadsheet.

Selected Findings

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Information about Highmark, the largest Blue Cross Blue Shield provider in the state of Pennsylvania, was placed in the attached spreadsheet. A summary of this information found is below.


Research Strategy

Most information for Highmark was found on their website and their social media channels. We looked through healthcare comparison sites to see how Highmark compares to the competition and defined their strengths and weaknesses accordingly. For marketing, we looked at common themes on their website, their digital ads, video ads, and social media.

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The requested information on Aetna have been provided in column D, rows 4-12 on the “Highmark” tab of the attached spreadsheet. Aetna has positioned itself as a company that focuses on serving the community and consumers.

Selected Findings

  • Aetna has leveraged its parent company’s “retail footprint to reach more than 75% of all Medicare Advantage–eligible members in the near term.”
  • Aetna’s Individual Medicare Advantage Prescription Drug (MAPD) plans would be available in 46 states plus Washington, D.C. in 2021.
  • An estimated 81% of Medicare-eligible beneficiaries in the United States can access Aetna’s $0 monthly premium Medicare Advantage plans.
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AARP / UnitedHealthcare

The requested information on AARP / UnitedHealthcare have been provided in column E of the Highmark tab of the attached spreadsheet.


  • UnitedHealth is the largest health insurance company in the United States and AARP is the largest lobby and association for seniors 50 and older.
  • UnitedHealthcare's AARP Medicare Supplement Plans leverages social media, TV ads, display, and print marketing channels to promote its product offerings.
  • The company uses the tagline "Take charge of your health care."
  • UnitedHealth-AARP Medicare supplement insurance plans is used by over 4.5 million retirees in the U.S. The plan offers a competitive, cost-effective rates nationwide.
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UPMC is the largest non-governmental employer in Pittsburgh, with over 90,000 workers. UPMC positions itself as a company focused on improving the health of its members. Other details on the company's marketing, competitive advantage, strength, and weakness are presented in the attached spreadsheet.

UPMC Company Analysis

  • UPMC has 25 hospitals and over 600 doctor officers and outpatient sites, giving them a steady stream of revenue (over $21 billion).
  • They are a well-known company with over 3.9 million members covered by the company's insurance products.
  • UPMC is affiliated with the University of Pittsburgh, allowing it to expand research, funding, and resources.
  • UPMC is investing in innovation through its venture arm, UPMC Enterprises, and have already made several strategic partnerships, including partnership with digital prescribing/analytics platform Xealth, online behavioral wellness tool Lantern, and supply chain company Pensiamo.
  • UPMC has an economic impact of about $36 billion.
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Geisinger is the largest health system in the six-county region and central Pennsylvania. Geisinger positions itself as a provider of better healthcare with easier access for everyone. The requested information on Geisinger Health has been provided on rows 4-12, column G of the attached spreadsheet.

Selected Findings

  • Geisinger’s health system comprises 13 hospitals and two research centers, serving 3 million residents across 45 counties in Pennsylvania and southern New Jersey. The company's annual economic impact is more than $8.9 billion on local, regional, and state economies.
  • Pennsylvania DOH's inspection of Geisinger's facilities in October 2019 found unsanitary equipment, dirty linens, and a failure to follow state law to report disease outbreaks, leading to three newborns' deaths.
  • In August 2020, the Department of Justice (DOJ) sued Geisinger Health's move for the partial acquisition of Evangelical Community Hospital due to antitrust concerns.
  • In 2019, the company launched a campaign with a theme of "Long Live Everyone." The integrated media campaign by DuftWatterson reintroduced the Geisinger brand to their local communities.
  • Geisinger's campaigns utilize TV commercials, newspapers, magazine ads, billboards, live events, digital media, and OOH advertising channels.
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Medicare Overview

Original Medicare, Medicare Advantage, Part D, and Medicare Supplement Insurance (Medigap) are some of the main offerings of Medicare. An overview of the Medicare landscape in the US has been presented below, along with an outline of the research strategy.

Key Differences Between Medicare Offerings

  • Medicare offers four main offerings — Original Medicare, Medicare Advantage, Medicare Supplement Insurance, and Medicare drug coverage (Part D). While Original Medicare is the general Medicare plan, Medicare Advantage and Medicare Supplement Insurance add certain benefits to the original plan.
  • Hospital insurance (Part A) and medical insurance (Part B) are the standard features included in Original Medicare. Medicare Advantage (Part C) is an alternate plan that offers some additional benefits, such as prescription drug coverage, to Original Medicare.
  • Medicare Supplement Insurance (Medigap) only supplements Original Medicare and does not act as an alternative.
  • Many people prefer adding a drug plan (Part D) with Medigap. Part D of Medicare covers prescription drugs that Original Medicare only covers in certain situations.
  • In Original Medicare, there are certain gaps that the plan does not cover. Such gaps include coinsurance at skilled nursing facilities, copayments at a doctor's office, and the deductibles not covered by Part A of Original Medicare. Medigap covers all these remaining healthcare costs.
  • Similarly, Original Medicare covers multiple medical services, such as hospitalizations, doctor visits, diagnostic tests, blood work, and outpatient surgery. However, Original Medicare and Medigap do not cover dental, vision, hearing aids, and gym memberships. The Medicare Advantage plans cover the aforementioned services in addition to prescription drug coverage.
  • The Medigap policy and Medicare Advantage plans have different costs when compared to Original Medicare, depending on the benefits. Medigap and other prescription drug insurance policies have significant premiums. However, Medicare Advantage plans may have a lower or no premium when compared to Medigap.
  • While Medicare Advantage is an alternative way to get Medicare benefits, a Medigap policy only supplements the Original Medicare benefits. This is the key difference between the offerings. Similarly, a person can't have access to both Medicare Advantage plans and Medigap.

Pricing of Medicare Programs

1. Original Medicare

  • The Centers for Medicare & Medicaid Services (CMS) is the federal agency that provides Original Medicare. The agency pays Medicare from two trust funds in the US Treasury. The premium for Original Medicare is the same throughout the country.
  • Original Medicare comprises Part A (Hospital Insurance) and Part B (Medical Insurance). Most people don't pay monthly premiums for Part A because they fit the eligibility requirements for the premium-free Part A.
  • The people who don't qualify for the premium-free Part A have to pay "a premium of either $252 or up to $458 each month in 2020 depending on how long they or their spouse worked and paid Medicare taxes."
  • The standard government-regulated premium fee for Part B is $144.60. According to Medicare's website, most people pay the standard premium for Part B. Private insurance companies don't have control over the pricing of Original Medicare because it is completely regulated and controlled by the government.

2. Medicare Advantage Plans (Part C)

  • Medicare Advantage plans are provided by CMS-approved private health insurance companies. The pricing of Medicare Advantage varies on the basis of the selected plan. Many plans under Medicare Advantage have a $0 premium.
  • The premiums for Medicare Advantage plans are regulated by and filed with the CMS. The pricing of the plans can differ from state to state, depending on the plans available under Medicare Advantage in the states. Therefore, there are no fixed regulated prices.
  • The pricing and fees for different plans under Medicare Advantage mostly depend on their availability, premium charges, yearly deductibles, and services.
  • Since the program is regulated by the federal agency, the premium fee for a single plan under Medicare Advantage costs the same across different insurance providers. Therefore, insurance companies don't have much control over the pricing and fees. However, the out-of-pocket costs for the plan might vary.
  • The pricing for a specific plan and area can be identified from Medicare's website. For example, 50 different Medicare Advantage plans are available for Dallas, Texas.

3. Medigap and Part D (Medicare Drug Coverage)

  • Medigap and Part D are also provided by Medicare-approved private health insurance companies. The health insurance premiums for the Medigap policy are filed with and regulated by the Department of Insurance of the respective states of the US.
  • The pricing of Medigap varies, depending on the states. It also depends on the plan type, the private insurance company offering the policy, and the plan rating. Therefore, there are no fixed regulated prices.
  • Some articles and reports that provide more information on how the pricing of Medigap is set can be found on Medicare and Medicare Resources.
  • The prices for Medigap plans for different areas can be compared from this link.
  • The pricing of Medicare drug coverage (Part D) depends on the drug tier, prescriptions, the drug benefit phase, the pharmacy, and the insurer. According to eHealthInsurance, private insurance companies set their own costs for Medicare drug coverage (Part D).
  • According to Medicare's website, "each insurance company decides how it will set the price, or premium, for its Medigap policies." Therefore, insurance companies have a lot of control over the pricing of Medigap policies and Part D.

Revenue-Generating Medicare Programs

  • Medicare Advantage (Part C) and Medicare Supplement Insurance (Medigap) are the Medicare programs that generate the most revenue for insurance companies. These Medicare programs are offered by private health insurance companies.
  • According to a report by KFF, "gross margins are the difference between premiums collected and medical expenses and do not account for administrative expenses." For the 2016-2018 period, the aggregated annual gross margin for Medicare Advantage was $23.9 billion. According to the report, the average simple loss ratio (total medical expenses as a percentage of earned premiums) for Medicare Advantage was 86% for the same period.
  • According to a report by Darwin Research, many top insurers in the US saw big increases in their Medicare Advantage (MA) market in 2019. Top companies, such as UnitedHealthcare, CVS Health, and Humana, all saw significant increases in their MA enrollment. Similarly, these companies experienced significant increases in their revenue in 2019.
  • According to Fierce Healthcare, "big-name health insurers raked in $8.2 billion in profit for the fourth quarter of 2019 and $35.7 billion over the course of the year." According to the article, growth in the Medicare Advantage market of those insurers was a common theme in their financial growth. The article contains more in-depth financial data.
  • According to a study by Mark Farrah Associates, Medigap plans collectively earned around $31.3 billion and incurred $24.7 billion in premiums and claims in 2018, respectively. Similarly, Medigap plans experienced an aggregate loss ratio (incurred claims as a share of earned premiums) of 78.9% (1.2% increase from 2017) in 2018. The report also contains other useful information.

Research Strategy

We started the research by looking into the key differences between Medicare's offerings. We were able to identify many offerings of Medicare, such as Original Medicare, Medicare Advantage, and Medigap. After going through the respective official webpages of the offerings, research reports, and industry articles, we were able to find many differences between the offerings. We sorted the key differences based on their descriptions, uses, features, and advantages.

We then looked into the pricing of the Medicare programs. We again looked into multiple industry articles, reports, and Medicare's webpages and found useful information on the topic. Based on our research findings, we were able to understand how much control insurance companies have over the pricing of the programs and how the government regulates the pricing, in addition to other useful information. Therefore, we have included all the related information in the research.

Lastly, we looked into the Medicare programs that generate the most revenue for insurance companies. We found that Medicare Advantage and Medigap are offered by private insurance companies only. Other programs, such as Orginal Medicare (Part A and B) and Part D, are offered by the government. We were unable to find the exact revenue figure that the medicare programs generated for insurance companies, even after going through multiple reports and industry articles. We were only able to find information related to the growth in enrollment for the two plans — Medicare Advantage and Medigap.

After extensive research across studies and research conducted on the industry, we were able to find Medigap's premium earnings and incurred claims data for 2018. This was the most recent data available in the public databases. Since Medigap is offered by insurance companies, we used the premium earnings and incurred claims figures in the research. Similarly, we were able to find the average gross margin data for Medicare Advantage for the 2016-2018 period. We have used this revenue-related information in addition to other supporting information to sort Medicare Advantage and Medigap as the most revenue-generating Medicare programs for insurance companies. In this way, the research was completed.
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Customer Journey: Supplemental Medicare Insurance

Three in five medicare supplement buyers consult a professional when purchasing a medicare supplement policy and the majority of them select an agent based on referrals. Medigap buyers are not always aware of the benefits that are excluded in their policies and can find regulatory changes confusing. When purchasing a policy, most buyers seek a reasonable price, good service, and rate stability. The number of buyers willing to meet agents in person fell from 65% prior to the pandemic to 12% post the outbreak.

How consumers learn about products

  • Nearly 60% of medicare supplement buyers "received assistance from a professional."
  • "20% of buyers were contacted without having any prior conversation with a particular agent."
  • Nearly 40% of buyers had "selected an agent based on a recommendation from a family member or friend; referrals also came from former employers, physicians or financial planners."
  • "When deciding which health insurance option to select, 31% of participants reported wanting a high degree of assistance from a professional. Those that sought support were looking for help in a variety of areas including: "
  • "Healthier consumers are less likely to desire a high level of agent assistance."
  • " Influence of Agent Recommendation When Selecting a Company for Medicare Supplement Insurance:"
  • "Some consumers ('Info Seekers') are far more likely to follow a do-it-yourself approach when researching health insurance options after age 65. These individuals will drive the decision-making process but still value agents’ recommendations."
  • "Among those that met with a professional, nearly two in three (65%+) had a one-on-one meeting."
  • A survey of Medicare product consumers (including Medigap) found that 55% prefer to "research and enroll in Medicare coverage with a combination of online tools and personal help from a licensed agent; 23% want to research and enroll entirely online."

Pain points

  • Medigap buyers are not entirely aware of the benefits excluded in their policies. "Nearly half of Ohio respondents (45%) incorrectly believe Medigap/Medicare Supplemental Insurance covers assisted living costs."
  • Regulatory changes, such as the one to Medigap Plan F in 2019 can stir up a "lot of confusion among members, brokers, and navigators alike."
  • While only 12% of buyers never want to be contacted by their agent after the initial sale, nearly half (46%) of buyers do not hear from their health insurance agent after they are sold the policy.
  • "Even for those who had kept in contact, over 50% of consumers, not their agents, initiated contact with the agent at their first-anniversary date."
  • "Of those that prefer to have an ongoing relationship with their agent, nearly 70% prefer contact by telephone or email."
  • As referrals are the most common ways buyers get in touch with agents, it is important that agents stay in touch with buyers even after the initial sale and strong relationships with consumers after the initial sale for more business opportunities. Also, not staying in touch could be a reason for new buyers to switch policy.

Key decision-making factors

  • "The most popular aspect of Medigap was the 'financial security and peace of mind' that Medigap policies provide. An America's Health Insurance Plans (AHIP) survey found that "Medigap buyers do not compromise coverage for lower monthly bills." Most Medigap buyers are only price-conscious to the point that the price of the policy is not unreasonable.
  • "How the Selected Insurance Company Compared to Other Companies Offering Medicare Supplement Plans"
  • "When consumers initiated the contact with the agent, they opted for the carrier with the lowest cost option more often than when they had received a referral or if the agent had contacted them directly."
  • "The AARP Medicare Supplement Plans insured by UnitedHealthcare remain the most popular Medigap plans in the United States. These plans had an increase in enrollment, due in part to outstanding service, rate stability, and customer loyalty."
  • "Insurers are no longer (since 2020) able to sell the most popular Med Supp offerings, Plans C and F, to newly eligible individuals. The elimination of first-dollar coverage for Med Supp plans" will close the financial value proposition gap between Medigap and Medicare Advantage plans, resulting in cannibalization of Medigap sales.
  • "A May 2019 eHealth survey found that 53% of those who came to eHealth after visiting bought at eHealth because they valued personal assistance from an agent." GoMedigap ( is one of eHealth's portals.

Change in shopping behavior post the Covid outbreak

  • According to Deloitte, "COVID-19 has dramatically accelerated the adoption of digital health."
  • "According to Deft Research’s COVID-19 study that surveyed Medicare consumers between April 24 – May 4 of this year: "
    • "17% of respondents reported setting aside direct mail for a day or more before opening "
    • "21% said they have been throwing away junk mail they would otherwise read"
    • "15% are disinfecting their mail with a household cleaner"
    • "61% of Deft’s respondents said that if they were to use an agent, they would prefer to speak with them over the phone "
    • "15% of seniors said they would rather exchange emails"
    • "Only 12% said they would prefer to meet in-person" (from 65% prior to the pandemic)
    • "Seniors are reporting an increased adoption to video calling with 33% reporting they are video chatting with friends and family"
    • "Since the start of the pandemic, telehealth usage has increased greatly with 18% of respondents having a telehealth visit compared with just 4% prior to COVID-19. " Therefore, it would help to promote telehealth benefits from Medigap.

Research Strategy

We searched survey reports, websites of players offering Medigap, KFF,, CMS, industry portals such as Medicare Supplement, and media sources to research the purchase journey of a Medicare supplement buyer. A slightly dated report (2015) survey report by PMS brokerage was used to furnish insights on the customer journey as more recent reports were publicly unavailable. We did not find any sources detailing the customer journey of Medicare supplement buyers post the Covid outbreak either. However, we have provided survey statistics related to Medicare insurance customer preferences during the pandemic as the Medicare and Medigap demographic is similar (slightly older for Medigap buyers).
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Psychographic Profile: Supplemental Medicare Insurance

The majority of supplemental Medicare insurance buyers are seniors who are optimistic and spend about 1.7 hours more per day on leisure activities.


  • According to the AHIP (America's Health Insurance Plans) report on the State of Medigap, most medicare supplemental insurance (Medigap) buyers are seniors. The report also suggests that Medicare Supplement and Medigap are different names for the same type of health insurance plan.
  • Age distribution of Medigap policyholders shows that 52% of buyers fall in the age group of 65-74 years, 31% in 75-84 years, 14% are 85 years and older, and only 3% of Medigap policyholders are younger than 65% years. This implies that most supplemental medicare insurance buyers are seniors.

Psychographic profile of supplemental Medicare insurance (Medigap) buyers


  • Most of the seniors prefer to spend about 9.67 hours every day in personal care activities (including sleep), 3.77 hours watching TV, and 2.41 hours in household activities.
  • Seniors spend only 0.31 hours doing exercise every day, 0.23 minutes in telephone calls, mail, and e-mail.


  • According to the American Time Use Survey, released by the Bureau of Labor Statistics, seniors spend about 1.7 hours more per day on leisure activities.

Reading habits

  • Seniors spend about 0.62 hours every day reading.
  • According to an Accenture report, about 3 in 5 seniors are somewhat or very likely to turn to online communities, such as Patients Like Me, for reactions to a doctor’s recommendation before acting on it.

Spending habits

  • According to the BLS report, for seniors, housing is the greatest expense in dollar amount and as a share of total expenditures for households.
  • BLS report revealed that clothing and transportation spending, and contributions for pensions, and social security decline with the age of seniors. The report also suggests that healthcare spending increased with the age of seniors.

Value s

  • According to Elderly Services, seniors in the U.S. value relationships with family and friends above all else—and that includes money.


  • U.S. seniors are proactive with their health and are wellness-oriented.
  • According to Accenture data, about 17% of US citizens about the age of 65 use wearables to track how many steps they walk or vital signs such as heart rate.


  • Most seniors in the U.S. are optimistic and have a positive outlook on their future and the aging process.

Research Strategy

Our research team searched for insurance industry publications, medicare supplemental insurance buyer reports, media articles, among others; however, there was no direct information available on the psychographic profile of supplemental Medicare insurance buyers. We found a report on the State of Medigap, which included the demographic profile of medicare supplemental insurance (Medigap) buyers and showed the Medigap policyholders are mostly seniors above 65 years of age. Based on the demographic profile of medicare supplemental insurance buyers, the research team determined the psychographic profile. We assumed that the demographic and psychographic items apply to this age group, and summarized the psychographics of supplemental Medicare insurance buyers.

Did this report spark your curiosity?


From Part 01
From Part 04
  • "“We’re taking this significant action to help ease the burden on seniors and others who are struggling right now. No American should be concerned about the cost of care when being treated for coronavirus,” said Bruce Broussard, president and CEO of Humana."
From Part 17
From Part 18