It’s being reported that the Democrats are about to introduce a bill into the house to allow American aged between 50-64 the options to buy into Medicare. This new is massive and has huge implications on the health industry in America. So, how will this impact Clover Health?
Clover Health are a Medicare provider who offer a range of different, affordable tailor made plans that include, Dental, vison and hearing, as well as prescription drugs, over the counter allowances and many more though the the clover assistant. Although these plans are pretty standard, what is not standard is the rate of growth Clover Health has experienced in this area.
In their original listing, Clover Health mention that they are growing 3x faster than the industry average while also maintaining a customer base who visit the hospital less times than the average as seen in the image below, already you are beginning to see a company that already benefits extremely well from operating in this space and is beginning to develop their expertise.
Considering that overtime Clover predict that they will grow at a compounded annual growth rate of over 30%, a larger pool of people able to be apart of medicare will benefit greatly the companies potential to capture a larger percentage of people who are going to need coverage.
This may mean that, if the strategy and resources were to be executed to plan, the company may experience growth rates beyond their original estimates as they did not take into account the now possible larger segment of the population available to them.
Presuming the bill were to go through, the clover health assistant that is both a lot more scalable than the competition and a lot more engaging, new potential customer may find themselves drawn to the product by way of ease and less friction than the competition. Which is also a massive benefit.
All in all, a larger Medicare base is great news for a company like Clover Health. It greatly increases their total addressable market without them needing to move into a different part of the industry. Revenue should be positively effected as a result. Profitability may be effected however, but this largely depends on their ability to scale their operation in time. As we know, Clover Health is not currently profitable.
While you’re here, why don’t you follow us on twitter? It’s the best place to interact with both the author’s of these posts as well as the wider community. We would really appreciate it! You can find our page here