Clover Health Sees PPO Edge, Cohort Gains as Medicare Advantage Pricing Tightens

Clover Health is positioning its PPO-heavy Medicare Advantage business for an industry shift away from zero-premium PPO plans. About 98% of its members are in PPO plans, which the company believes fit its operating model better than arrangements reliant on traditional value-based contracts. Member retention and aging cohorts are improving economics. Retention exceeds 95%, while insurance gross profit has historically risen by about $70 per member per month from year one to year two and another $85 from year two to year three. Clover is targeting its first year of GAAP net income profitability. Management cited Clover Assistant engagement, clinical programs and continued AI investment as key drivers, while assuming 4.5-star ratings for both PPO and HMO contracts in its 2027 bids.

Clover Health Investments NASDAQ: CLOV is positioning its Medicare Advantage business to benefit from industry pricing discipline, member retention and the maturation of member cohorts, Interim Chief Financial Officer Clay Thornton said at Jefferies’ Healthcare Services and Technology Conference in Nashville. Speaking with Jefferies Healthcare Equity Research’s Dave Windley, Thornton described Clover’s approach as contrarian within Medicare Advantage. The company uses its proprietary Clover System, including its Clover Assistant physician-enablement platform, to support both contracted physicians and its employed clinicians. Thornton said the technology reaches roughly two-thirds of Clover members through at least one technology-powered visit in a given year.

Unlike some Medicare Advantage competitors, Clover retains full financial risk for its entire member population rather than delegating risk to downstream value-based providers, Thornton said.

Thornton said the Medicare Advantage industry has experienced several turbulent years, including changes related to V28 risk adjustment, elevated utilization, Part D redesign and Star Ratings volatility. While he said it is difficult to predict conditions beyond the near term, he has seen plans respond with more pricing discipline heading into 2026 and in early views of 2027 benefit offerings. “We’ve seen a lot of that through the national players itself,” Thornton said, referring to pricing discipline. He said plans have increasingly moved away from PPO offerings, particularly zero-premium PPO products, while benefit designs have generally become less generous or remained stable rather than improving.

For Clover, utilization trends have been relatively favorable in inpatient and skilled nursing facility care, according to Thornton. He said outpatient utilization had created pressure, but those trends peaked around March and began moderating during the second quarter. Thornton attributed Clover’s ability to manage certain areas of medical-cost trend to its clinical programs, including a longitudinal home-based primary care program focused on members with the greatest health needs. He said approximately 10% of members account for 60% of costs, a population that also has substantial inpatient utilization.

Clover has reported retention above 95%, which Thornton said has been supported primarily by benefit stability. The company enhanced its benefit offering in 2025 and emphasized stability in 2026 while other plans made broader changes, he said. High Clover Assistant engagement also contributes indirectly to retention, Thornton said, because it supports better cohort economics and helps Clover maintain stable be...