Clover Health Investments Sees 2027 Growth as Rival Exits New Jersey

Key Points

• Clover expects strong membership growth in 2027, helped by a competitor leaving New Jersey and roughly 40,000 Medicare Advantage members seeking new coverage. About 85% of Clover’s recent new members switched from other Medicare Advantage plans, a group the company says generally has lower medical costs.
• The company reported about 50% membership growth and, through the third quarter, $97 million in adjusted EBITDA and $62 million in net income. Its largest contract’s five-star rating may also support year-round enrollment for eligible members.
• Clover ended 2026 with more than $500 million in cash, investments and securities, no debt, and over $200 million in operating cash flow, according to CFO Clay Thornton. It will reassess capital needs after enrollment before deciding on further investment in growth, technology, and operations.

Clover Health Investments NASDAQ: CLOV expects another year of strong membership growth in 2027, aided by a competitor’s exit from its core New Jersey market and what it sees as favorable positioning for its Medicare Advantage plans, Chief Financial Officer Clay Thornton said.

Thornton, recently appointed CFO after serving in the role on an interim basis, said Clover generated $97 million in adjusted EBITDA and $62 million in net income year to date through the third quarter, while membership grew roughly 50%.

Medical trends have been more favorable than the company expected at the start of the year, he said. Inpatient utilization has been lower across member cohorts, including among new members, while Medicare Part D drug trends have also been lighter than anticipated. Clover has seen higher utilization in some outpatient categories, including surgery, observation visits and emergency room stays.

New Jersey Exit Creates Growth Opportunity

Thornton said a plan exiting New Jersey has approximately 40,000 Medicare Advantage members who will need to find coverage for 2027. He also pointed to what he described as a continued retreat by national managed care companies from $0 premium preferred provider organization, or PPO, plans.

“Our market advantage from a product standpoint has grown,” Thornton said, adding that the plan exit and competitive landscape were contributing to strong growth during the annual enrollment period.

About 85% of Clover’s new members following the 2026 enrollment period switched from other Medicare Advantage plans, Thornton said. He expects that proportion to be similar or potentially higher for 2027. Members switching from other Medicare Advantage plans generally have significantly better medical loss ratios than people aging into Medicare or joining from traditional fee-for-service Medicare, he said.

Thornton said Clover’s aggregate medical trend assumptions can be lower than those of national peers because newer members represent a larger share of its enrollment and generally have lower medical costs. At the individual cohort level, he said, the company makes generally similar assumptions about costs and utilization.

Star Ratings and Membership Economics

Clover’s largest contract received a five-star rating, giving the company an opportunity to enroll eligible Medicare Advantage members year-round through a special election period. Thornton said the rating also appears to be helping drive enrollment through direct channels, including the federal Medicare website and Clover’s own site.

He declined to estimate the potential effect of year-round enrollment, saying the company would assess its options after the annual enrollment period and when it issues 2027 guidance. Clover expects to be paid based on 4.5 stars in both 2027 and 2028, he said.

Thornton said the company expects earnings to benefit as large groups of newer members move through what Clover calls its cohort maturation curve. Two large cohorts will be progressing through that curve in 2027, and a third could follow in 2028 if growth remains strong, he said. Clover has not set a long-term margin target while its membership is growing rapidly.

Technology and Expansion

Thornton identified broader use of Clover Assistant, the company’s clinical technology, and tighter provider payment integrity as opportunities to manage costs. About two-thirds of Clover members see a clinician using Clover Assistant in a given year, he said.

As it considers new markets, Clover is examining whether it can replicate the conditions that supported its performance in New Jersey. Its employed clinicians can use the technology in other states, while engagement with in-network physicians depends partly on having enough Clover members in a provider’s patient base, Thornton said.

He also said Clover is evaluating chronic condition special needs plans as a potential product for 2028 and beyond. The company has no near-term plans to become a Medicaid managed care organization, a requirement he cited for offering dual-eligible special needs plans in fully integrated states such as New Jersey.

Counterpart Health, which offers the technology to third parties, is progressing toward a near-term goal of managing as many third-party lives as Clover Assistant serves within Clover’s own Medicare Advantage plan, Thornton said. The current focus is on engagement and demonstrating the technology in new markets rather than near-term economics.

Capital Position

Thornton declined to size upcoming regulatory capital needs but said Clover had more than $500 million in cash, investments and securities, no debt, and had generated more than $200 million in operating cash flow during 2026.

After enrollment concludes, the company will reassess membership, expected 2027 cash flow and capital requirements before deciding how much to invest in technology, operations or additional growth, he said.

About Clover Health Investments (NASDAQ:CLOV)

Clover Health Investments is a U.S. healthcare company focused on Medicare. Its insurance business offers Medicare Advantage plans to eligible beneficiaries in select markets, combining medical coverage with support intended to help members access care.

The company also developed the Clover Assistant, a technology platform that organizes patient information and provides clinicians with insights to support care decisions. Clover has described the platform as a way to help primary care providers identify health needs and coordinate care for people with complex conditions.

Founded in 2014, Clover Health became a publicly traded company in 2021 through a merger with a special purpose acquisition company.

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