Clover Health to add grocery benefit, Walmart online food delivery

Clover Health (CLOV) is joining other Medicare Advantage (MA) plans in offering a grocery benefit to its members, an option that was first made available by the U.S. Centers for Medicare and Medicaid Services (CMS) in 2018. 

Clover CEO Vivek Garipalli told Yahoo Finance the goal is to help alleviate health-determining factors, known in the industry as social determinants of health, which include access to healthy food.

Major MA players like Humana (HUM) and Centene (CNC) have already begun to offer the benefit, as have others in the past year.

Clover has calculated an annual benefit of between $300 to $500 per member, depending on the plan, which comes at no cost to plan members. Qualifying members are those with underlying conditions.

The total amount will be reimbursed per quarter and phased in through the year. 

While it won’t come near the cost of annual groceries, Garipalli said, it will go a long way to aid those in need.

In addition, it’s another way the insurer can monitor to see how members are faring. If a member is using the benefit, which comes in the form of a payment card, then suddenly stops using it, Clover gets prompted to reach out.

“Thats a big signal from an outreach perspective. So, we think there’s going to be significant medium and long term ROI,” Garipalli said.

The range of coverage offered is comparable to other insurers. Humana offers anywhere from $300 to $600 per year, and Centene offers free memberships for grocery delivery through Shipt, which is a $99 value.

Clover also allows grocery delivery through Walmart (WMT), which it had a co-branded insurance product with until recently.

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The program starts off phasing in with $20 benefits in August, and then hits $75 to $125 for the fourth quarter.

“I think success for us is if we can keep increasing it modestly over the long term. But we started off at a number we thought we could afford,” Garipalli added.

“If we wanted to make it $1,000, as of today, it wouldn’t be affordable for us,” Garipalli said.

The benefit is still pending CMS approval. The agency is currently reviewing all plans and will approve or deny by mid-September.

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