What Insurtechs Know About Medicare Advantage That Plans Don’t
National carriers like Humana and UnitedHealthcare have scale, capital, and decades of operational history. Regional plans have deep community roots and provider relationships built over years.
And then there are the insurtechs. Younger, smaller, and in most cases still burning cash. And yet they’re consistently outperforming on the metric that matters most right now, Star ratings.
How does that happen? And more importantly, what does it mean for the rest of the market?
The Market is Under Serious Pressure
To understand why insurtechs matter so much right now, you have to understand the environment they’re operating in. The average MA plan rating dropped from 4.07 Stars in 2024 to 3.92 in 2025.
The 4-Star threshold is where CMS quality bonus payments kick in, and for a plan with 100,000 members, the gap between 3.5 and 4 Stars can mean $25 million to $100 million in annual revenue difference.
While medical costs are running 6% to 8% annually, CMS tightened its risk adjustment model, and benchmark rates actually dropped for the first time in years. Plans are getting squeezed from every direction simultaneously.
National carriers are retrenching, cutting unprofitable counties, and in some cases exiting markets entirely. Regional plans are struggling to maintain profitability without the scale to absorb the volatility. The market is consolidating fast, and the question of who survives is very much open.
Against that backdrop, the insurtechs are expanding. One company grew from 5 states to 13 in a single year. Another insurtech grew membership by 58% in 2024. Also, Clover just posted its first profitable quarter. These are companies growing into a market that’s getting harder, and they’re doing it by winning on quality.
3 Things Insurtechs Do Differently
If you look closely at what separates insurtech performance from traditional plans, three things stand out consistently.
1. Member Engagement at the Individual Level
Traditional plans tend to manage populations through broad campaigns: mass mailers, phone call blasts, cohort-level outreach.
Insurtechs manage individual members. They track behavior, identify specific barriers, and intervene based on what’s actually going on with a specific person.
That’s not just a philosophical difference. It has real operational implications for how data is structured, how care teams are organized, and what technology infrastructure looks like underneath the model.
2. Deep Clinical Integration
Clover built an AI tool that surfaces care gaps and documentation opportunities directly inside the physician’s EHR during patient visits.
Devoted embedded dedicated care teams that members can reach directly rather than navigating a call center.
Alignment Healthcare built a platform that coordinates in-home and virtual care with daily member touchpoints.
In each case, the plan isn’t waiting for members to come to them. They’re woven into the clinical workflow where care actually happens.
3. Modern Data Infrastructure
Insurtechs didn’t inherit legacy batch-processing systems from the 1990s. They built modern pipelines from scratch.
When a member misses an appointment, they know the same day. When a member is trending toward non-adherence, predictive models flag it before the gap opens.
The difference between weekly data and daily data sounds like a technical detail. In practice, it’s the difference between intervening and documenting what already went wrong.
Why This Should Interest More Than Just Health Plans
The insurtech playbook in MA is essentially a proof of concept for what member-centric, data-driven care management looks like at scale. And the underlying elements aren’t unique to insurance. They’re applicable anywhere an organization needs to drive behavior change across a large, heterogeneous population.
For regional health plans, the immediate relevance is obvious. Their survival may depend on whether they can adopt what insurtechs have built before the market leaves them behind.
But the patterns here also matter for anyone building technology for this space. Vendors selling into MA plans need to understand why traditional plan buyers are skeptical of digital initiatives, what the actual capability gaps are versus the perceived ones, and what a credible transformation looks like from an executive’s perspective. That context changes how you position, what use cases you lead with, and what objections you’re actually dealing with.
And for anyone watching the broader healthcare data infrastructure conversation, the MA shakeout is a live case study in what happens when organizations delay modernization too long.
The technology debt is showing up directly in Star ratings, in member retention, and in whether a plan survives the next three years.
The Moment is Right Now
The companies that figure out how to combine local market knowledge and provider trust with modern data infrastructure and member-level engagement will have a genuinely durable position. The ones that don’t will be acquired or wound down.
The playbook is becoming clearer. The insurtechs have already run the experiment. The question now is who’s paying attention.
If you want to go deeper on any of this, including the competitive landscape, the data infrastructure requirements, and what a realistic transformation roadmap looks like for a regional plan, read the full white paper linked below.
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