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Diving brief:
- CVS Health has acquired startup Medicare Advantage broker Hella Health, according to a LinkedIn post from Hella's CEO.
- Acquisition will add Hella range of insurance offerings and digital capabilities for seniors to CVS technology platform, according to CEO Rafal Walkiewicz post Tuesday.
- Founded in In 2021, Hella Health sells insurance through a licensed agency and partners with another telephone shopping platform. The company says it offers “thousands” of MA plans with insurers like CVS, UnitedHealthcare, Humana and Cigna. The terms of the contract are not disclosed.
Dive overview:
MA plans, which are Medicare coverage offered by private insurers, are increasingly popular with seniors. As plans have proliferated, so have brokers… around a third of MAID beneficiaries say they use middlemen to help them buy plans, according to the Commonwealth Fund.
However, MA brokers have faced increased scrutiny from regulators amid concerns that intermediaries are using predatory marketing tactics, including misleading advertisementsto obtain lucrative compensation from insurers.
Last month, the Biden administration issued a final rule cap the amount MA plans can pay brokers. Before the rule, brokers could raise more than $1,300 per registrant each year through additional payments, more than double the previous compensation limit set by regulators.
Analysts previously said the final rule, first proposed last year, could also help smaller plans with fewer marketing resources compete for MA members.
For its part, Hella's website says that, although she receives a commission for the sale of the plans, she does not benefit from it “marketing incentives from insurance companies. »
A CVS spokesperson declined to comment on its acquisition of Good morning. However, the purchase suggests that CVS wants to strengthen the digital capabilities of its health services unit, which sells a range of services to other insurers and health companies.
CVS captures Hella despite significant turbulence in MA. On Wednesday, the insurer announced first quarter results which were worse than the healthcare giant or Wall Street analysts predicted, as the company grappled with high medical utilization from MA seniors. As a result, CVS reduced its 2024 guidance.
CVS purchased Hella from Boston-based venture capital firm Cue Ball.