Let’s talk health insurance.
Bright Health, a tech-enabled health insurance startup has raised $200 million in a round led by Declaration Partners and Meritech Capital, with participation from existing investors including Bessemer Venture Partners, NEA, and Greycroft. The company, which was founded by former UnitedHealthcare CEO Bob Sheehy, launched in 2016 as traditional insurers abandoned the Affordable Care Act exchanges. It aims to be a provider of affordable individual and family healthcare both directly and through state-based marketplaces. The company has raised a known total of more than $440 million.
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Bright Health emphasizes that its “narrow network” with healthcare providers has allowed the company to present more affordable options for individuals seeking care. Per its website, that means the company has “chosen to establish an exclusive relationship” with certain health clinics, doctors, and hospitals. Bright Health currently only operates in select markets, including Alabama, Arizona, and Tennessee. The company will be using the funding to expand into more cities, with plans to triple its geographic footprint, per its press release.
Bright Health isn’t the only company looking to jump in on the individual market with a focus on the narrow network. Oscar Health, which is led by Thrive Capital Founder Joshua Kushner, has also raised a significant amount of cash for its own efforts, including a $165 million round led by Founders Fund in March 2018, and a $375 million investment from Google’s parent company Alphabet in August 2018. Take a look:
Oscar Health, which is valued at over $3 billion, has taken a very tech-focused approach to its market. First off, it’s mobile first, which means that its app integration is meant to make it easier to book appointments, make changes, and view updates. The company also emphasizes its telehealth program, which connects its customers to healthcare specialists through video conference and chat-based appointments.
That could be a good angle for Bright Health to pursue as more millennials seek affordable insurance options. It’s a notion insurance provides in all industries, not just health, have taken into consideration. Take Root Insurance, for example, the app-based car insurance provider that relies on cell phone data to assess driving skills. In any case, the round speaks to the remaining confidence, at least on the part of investors, in the individual insurance market and these companies’ abilities to tap into the coverage gap.
Illustration Credit: Li Anne Dias