Instacart, Alignment strike Medicare Advantage deal

Health insurance startup Alignment Health and grocery delivery service Instacart will jointly market Medicare Advantage policies next year, the companies announced Tuesday.

The co-branded Medicare Advantage plans will be available in 13 California and Nevada counties and include extra benefits such as a quarterly stipend worth up to $100 that can be used for Instacart purchases or Instacart+ memberships, according to a news release.

Related: TukeyGate: Insurers vexed by Medicare Advantage star ratings declines

Alignment expects about 30,000 Medicare beneficiaries will enroll in these plans, said Dawn Maroney, CEO of Alignment Health Plan and president of markets for Alignment Health.

"If we can offer dollars to promote wellness and eating more fruits and vegetables, and then tying it into our exercise and fitness programs, then we're reversing the cost when it comes to prescription drugs and the possibility of somebody being admitted in a hospital," Maroney said.

Medicare Advantage insurers have increasingly invested in grocery assistance, food stipends and medically tailored meals since the federal government classified food for chronically ill patients as an eligible use of premium revenue in 2020. The White House strengthened support for these interventions by including "food as medicine" in its National Strategy on Hunger, Nutrition and Health last year.

The Alignment Health deal represents Instacart's introduction to the Medicare Advantage market after launching its Instacart Health division last year. The company also will partner with financial technology company InComm Payments to facilitate Medicare Advantage and Medicaid enrollees using health benefits to purchase groceries next year.

Instacart aims to add enlist more health insurers as clients, said Sarah Mastrorocco, vice president and general manager of Instacart Health. Insurance companies would use Instacart technology to power their food as medicine offerings, she said.

“There's a growing interest there. Medicare has actually been pioneering in the space of supplemental benefits,” Mastrorocco said. “How do you help people increase their access [to groceries] and spend those supplemental dollars where they want, and also get food delivered to their house? We know not every dollar is able to be used by people that want to use them a lot of times because of transportation.”

Rival delivery service Uber Eats also will allow some Medicare Advantage and Medicaid enrollees to use health benefits to pay for food next year. Brick and mortar retail chains such as Kroger, Meijer and Walmart have similar relationships with Medicare Advantage carriers that enable policyholders to use insurance benefits to buy food.