Impact of Medicare Advantage Supplemental Benefit Expansion on Startup Funding

Bundorf, Kate

Ridley, David

Connolly, Michelle P

Zhong, Judy

2023-09-19T15:37:56Z

2023-09-19T15:37:56Z

2023-08-05

Economics

In 2018, the Center for Medicare and Medicaid Services (CMS) announced that they would expand the supplemental benefits that can be included in Medicare Advantage (MA) plans. The goal was to encourage insurers to innovate and test new benefit offerings that could improve health outcomes and reduce healthcare spending. A key player in this transformation is the MA vendor that provides supplemental benefit offerings to insurance plans, but this market is rather underdeveloped. To assess the implementation of this supplemental benefit expansion, this study examines the flow of funding into the emerging market of MA vendors. This paper uses a longitudinal approach and Crunchbase data on funding for 79,004 firms from 2014 to 2018 to determine whether there is a significant jump in funding toward MA vendors with supplemental benefit services following the policy change. The results show that both the average amount of funding per deal and the number of deals a MA vendor firm receives significantly increased following the expansion when compared with all other firms. This suggests that the policy may have been successful in promoting the development of the MA vendors market and the innovation of benefit offerings as more funding goes towards these companies.

https://hdl.handle.net/10161/29012

en_US

Innovation

Health insurance

Startup funding

Impact of Medicare Advantage Supplemental Benefit Expansion on Startup Funding

Honors thesis