Apple wants to bring the Apple Watch to Medicare Advantage members

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Apple is in talks with multiple undisclosed private US insurance companies about subsidizing the Apple Watch for millions of Medicare Advantage members, according to CNBC.

Medicare Advantage (MA) is a type of health plan offered by private insurers to US consumers over age 65 as an alternative to the government's traditional Medicare program. The discussions are the latest sign of Apple's aggressive moves into healthcare, which now span an FDA-approved wearable, a portable health record, and a joint surgery study.

Payers likely view the Apple Watch as a tool to boost customer lifetime value and satisfaction:

• Avoiding just one hospitalization would recoup the costs of a new Apple Watch.For example, the annual medical costs from hospital admissions for an AFib patient are nearly $5,000 higher than a non-AFib patient. Even if a payer shelled out the full $400 price tag for each Apple Watch, skirting just one admission through the Watch's AFib detection or expediting care for a recently fallen patient would likely create a large return on investment from reduced medical costs.
• Offering Apple Watches could boost member satisfaction and loyalty. In an informal survey of Business Insider readers, Business Insider Intelligence found that 48% of baby boomers say they're going to buy the Apple Watch Series 4 - exceeding the share of Gen Xers (46%), millennials (35%), and Gen Zers (29%) who said the same. While the survey data isn't representative of the general population - Business Insider readers tend to be younger, male, and tech-savvy - the results provide strong evidence that Apple Watches would receive a warm reception among seniors.

A partnership with MA plans would be a boost to Apple's ambitions to penetrate the robust senior healthcare market. Apple made it clear that the senior market was the target demographic for the latest Apple Watch during its high-profile launch September 2018. The Watch Series 4 comes stocked with an electrocardiogram (EKG) app, the ability to flag heart irregularities, and fall detection - all of which address conditions that disproportionately affect seniors.

Access to MA beneficiaries would be an immediate leg into this market and could boost sales among older consumers who wouldn't otherwise buy a wearable. Further, the MA market's growing steadily: The number of MA enrollees will approach 23 millionmembers in 2019, a 12% spike from 20 million members in 2018.

It's also not Apple's first dealings with payers: Apple's already working with John Hancock, UnitedHealthcare, and Aetna offer wearable programs to improve customer and employee health. These insurers offer wearable-based wellness programs in which consumers are incentivized to exercise more, an arrangement that can reduce healthcare costs and could pay dividends to MA insurers that adopt similar programs.