- Medicare Advantage startup Devoted Health says it is the first MA plan to offer the Apple Watch as a benefit to its members.
- The two-year-old company will subsidize $150 of the wearable's cost. Apple has reportedly been in talks for months now with numerous insurers to cover its wearable tracker.
- The move is an early proof of concept for tech-savvy payers offering wearables benefits for older consumers in MA, but is not the first time Apple has reached a wearables deal with an insurer.
It's still unclear whether wearables actually help consumers reach their health and fitness goals. But that hasn't stopped major players like Apple and Fitbit from aggressively courting insurers to cover their products for members interested in staying active and keeping an eye on their health.
Baby boomers are aging into Medicare and choosing privately-run MA plans at a higher rate. Roughly 20 million Americans are currently covered by the program, and that number is only forecast to rise. According to PwC, the market is expected to reach $350 billion in annual revenue by 2020.
Working within MA could be lucrative for wearables companies. Though older adults are more leery of virtual care than their younger counterparts, seniors are becoming more open to smartphone technology.
Over the past few years, Apple has tested a slew of features that could be attractive to an older population, like fall detection and heart health monitoring. The latest version of the Apple Watch touts an FDA-approved EKG monitor that detects irregular heart rhythms and alerts users of potential atrial fibrillation.
Apple is also conducting research in partnership with pharmaceutical giant Eli Lilly to see whether health features on its Apple Watch and iPhone can detect early signs of cognitive decline.
Devoted will cover $150 per year in costs for classes, programs and wearable devices like an Apple Watch, according to the company's marketing materials. Adopters will have to pick up the rest of the tab, however. The Apple Watch Series 3 starts at $199, while the newer Series 5 starts at $399.
Despite the fanfare, Devoted isn't the first payer to make a deal with Apple.
UnitedHealthcare incentivizes patients to walk 10,000 steps a day to help cover the cost of the Apple Watch, and Aetna agreed to cover a large portion of the price for select large employers and individual customers a few years ago. CVS =Health-owned Aetna also launched its own app for the device in May combining tracker and claims data to set activity goals and reward users for healthy behavior.
It's also not the first time a health tech company has made its products available in MA. Livongo, a provider of technology to help people manage diabetes and other chronic conditions, announced in May its tech would be available to MA members enrolled in Cambia Health Solutions' regional health plans.
However, according to Devoted, it's the first MA plan to partner with Apple specifically.
The privately-run Medicare plans are popular with beneficiaries and raking in billions for payers.
Companies like Apple are being enticed into MA partially due to a rule change earlier this year allowing plans to offer more flexible benefits, such as in-home care, meals or digital tools to support health outcomes, especially for people managing chronic conditions.
"We are pleased that CMS agrees that there is a wide variety of ways that older Americans can keep healthy, including fitness and nutrition classes, and activity monitoring devices such as the Apple Watch," Devoted spokesperson Kenneth Baer told Healthcare Dive.
Last year, CNBC reported Devoted was valued at $1.8 billion after raising an additional $300 million in October. The company was founded by Todd and Ed Park, the team behind health-tech companies Castlight Health and athenahealth.
Devoted currently covers only 4,000 members in Florida, a hot market for Medicare. However, it plans to scale to more than 100,000 members by 2023, according to a pitch deck obtained by Business Insider, and aims to make $1.2 billion in revenue that year.