SimplyInsured (YC W13) raises $750K to simplify health insurance
venturebeat.com
venturebeat.com
A significant part of the broker's value is the high-touch relationship and trust.
The market fit question to me is: if a state marketplace has a decent web portal (like California's http://www.coveredca.com ), what additional value does a private portal offer that NEITHER the official portal NOR an offline broker can offer?
(Don't mean this as polemical by any means; lots of states are not going to have great portals. Just interested in hearing opinions on this.)
[Edit: making CA link a real URL]
Some examples off the top of my head:
- A healthy 24 year old software engineer is making $75,000. This means he doesn't qualify for any of the tax subsidies by buying insurance on the exchange. He wants to avoid the $2,500 penalty for being uninsured, but every plan on the Covered CA will cost more than that over 12 months. Perhaps his best option is to buy an individual policy for catastrophic coverage only.
- A small business isn't sure whether it's optimal to insure their employees, or just give them a cash "bonus" and tell them to buy their own policy on Covered CA (similar to what Trader Joe's announced they're going to do with their part-time employees).
- Purchasing insurance on Covered CA is limited only to certain enrollment periods (this is perhaps the biggest misunderstanding, as I've seen various media personalities ask "why wouldn't healthy people just wait until their sick, and then get insurance?" countless times). However, there are exceptions for a life-changing event. Thus, a person who is laid off (thus counting as one of those life-changing events) would like information on whether their best option is to pay for COBRA or buy a policy on Covered CA.
Basically the ACA is complex, but it does turn health insurance into a much more structured and transparent market, which lends itself well to applications like SimplyInsured. Otherwise, what could any sort of system do for my third scenario, for example? All anyone could advise to have them stay on COBRA because they'd probably get screwed by letting it lapse and then trying to get an individual policy.
We've built software to normalize despite that - check us out!
The chart under Question #2 - answers your question.
There's a role in the government for insurance regulation, however companies like SimplyInsured are needed to actually execute.
This is FedEx vs. the Post Office.
Yes, California is a much larger market, but the Massachusetts exchange has been up and running for years. Given that, it seems obvious to me that, for now, Massachusetts is a far better proving ground than any other state for a health insurance business.
Some previous colleagues of mine just raised 2.6M a couple of weeks ago [1] for a very similar sounding idea [2]. This is a hot space right now with all of the attention on health care because of the ACA and all of the failings of the public exchanges in the press.
[1] http://www.bizjournals.com/twincities/blog/in_private/2013/0... [2] http://www.gravie.com/
The weird thing about ACA is it essentially turns this into a relatively low range problem; I'm going to be spending $200/mo to $400/mo in premiums, and I'm never going to be out of pocket more than $6350 on top of that. So even if I do exceptionally well, it's maybe a $200x12 - $3300x0.35 (tax savings on HSA) cost vs. a $400x12 plus epsilon cost vs. ($200x12 + $6350). Which isn't enough to really care that much, since most likely it's within $1-2k/yr regardless of which plan I pick. And I doubt your picking would be that much more accurate than a general WAG based on "do I often go to the doctor?"
I'd much prefer we don't devolve into a political argument. My question, I thought, was relevant due to ACA kicking in, which is the first step towards universal healthcare/single payer in the US (which would eliminate the business model in question).
In closing, here is healthcare spending as a percentage of GDP by country (almost all first world countries): http://upload.wikimedia.org/wikipedia/commons/a/a1/Internati... The US leads in spending, and only spending.
Also, we in the US tend to have bigger problems running giant federal bureaucracies, compared to these other smaller, more-unified nations. (How many government shutdowns have they had in the past 40 years?) Our existing single-payer-ish health bureacracies, like Medicare, suffer more fraud and cost-problems, and have a harder time enforcing steely-eyed rationing (aka "death panels") than elsewhere.
These smaller systems also benefit as free-riders from positive externalities thrown off by the United States' eccentric overexpenditures - like drug and new-treatment beta-testing. (If we become more like them, their own medical indicators could get worse.)
So the argument can't just be, "make it work like over there", when nothing here works quite like there, and our challenges of scale, culture, and politics are larger.
Which doesn't explain the vastly higher per capita (and even per GDP) costs.
> Also, we in the US tend to have bigger problems running giant federal bureaucracies
That doesn't explain why the US costs (again, per capita or per GDP) are still higher than the total costs in many countries providing universal coverage even if you exclude the slightly-less-than-half of US spending that is public spending.
> Our existing single-payer-ish health bureacracies, like Medicare
Medicare isn't single-payer-ish, as for decades there has been policy to move from traditional single-payer-ish "Original Medicare" to (usually partially, with a personal premium as well) publicly subsidized private insurance "Medicare Advantage" plans.
> These smaller systems also benefit as free-riders from positive externalities thrown off by the United States' eccentric overexpenditures - like drug and new-treatment beta-testing.
Er, a lot of drugs and new treatments are tested and accepted overseas before they are in the US.
If you can't answer why Medicare seems to do worse than your favorite "single-payer-ish" models, you haven't explained how making the entire system into a single-payer system, a bureaucracy of unprecedented size, will improve things over a smaller bureaucracy that's failing at controlling costs.
Some drugs and new treatments start elsewhere. A disproportionate number start in the US. Fancy new (and often unnecessary) treatments are one of the things driving our costs up.
It's not a difficult puzzle: nobody in our system is incentivized to care about costs. The insured consumer never sees the cost, the physician is incentivized to be cost-blind when choosing treatment options, and the insurance companies pass the costs back to employers, who don't get any say in treatment. The only other people who know what health care costs are unemployed and/or poor, and well...screw them, right?
You couldn't possibly choose a worse economic model for allocating health care. Medicare is much cheaper and more efficient than employer-based healthcare, but it can't overcome the structural expenses created by a system dominated by people who are almost totally cost-insensitive when it comes to their health.
When's the last time you comparison-shopped your prescriptions or other medical services?
There are some very expensive drugs, and they're not uncommon. For example, valcyclovir is a very common anti-viral drug, and costs something like $300-400 per course. The similar drug acyclovir is $20 as a generic, but is more annoying to dose. As a result, doctors will nearly always prescribe valcyclovir over acyclovir. For patients with a chronic infection, that's a mundane decision with an impact of tens of thousands of dollars per year. But unless you're a doctor or a pharmacist, you'd probably never know about the choice.
Insurance companies pass these costs on to the risk pool first, then onto employers. By the time the cost increases hit you (through employers cutting or reducing your health benefits), the implications are so far removed from the initial expenses that there's no way to close the cycle.
Of course it's going to be more expensive, with worse health outcomes, than a general population pool. That's how aging works.
I see this argument all the time, and never an elaboration.
I understand going from 1,000 to 1,000,000 people incurring growing pains, but I have a hard time understanding why people seem to think a system that works for 80,000,000 people in Germany wouldn't be scalable to 300,000,000.
…isn't quite single-payer, more like a "public option".
…has far more labor-business-government cooperation than the US.
…has the oldest tradition of social insurance, but still their current system was the result of gradual expansions over many years.
…runs lots of government services better than the US.
…is only half the area of Texas, but that area is as population-dense as Maryland (our 5th densest state).
Why can't any 300 million people in Africa just adopt US-levels of public services by willpower and legal fiat? Why can't the US make our 50-million-member Medicare as efficient as the German system? These structural, historical, cultural, and political path-dependencies matter.
"Make it work because I don't understand how it couldn't" isn't a good basis for the largest nationalization experiment ever.
Every first world country except the US has something approximating universal coverage, but not all of them use single-payer (or even a single basic coverage insurer with supplemental coverage from other payers.) Compulsory-purchase insurance models similar to those in the ACA (but, you know, actually universal) with private insurers are not unheard of (e.g., Switzerland uses that model)
Those are all, arguably, consequences of the poor access to health care in this country and the short-term incentives in this country to delay care. IOW, they are products of the system that we pay more for (per capita or even per GDP -- or even either way only considering public expenditures and excluding the private costs) than first world countries that provide universal coverage through government single-payer systems.
And I really don't see the avoidance of primary care being primarily financial either. A yearly routine physical is not very expensive, and is often free at many public health clinics. Likewise common preventive care like flu shots, pap smears, and prostate exams.
A big reason a lot of people don't go to the doctor is that they don't like going to the doctor. I'm in that group. Having insurance doesn't change that.
I dislocated my knee this spring and reset it and just stayed in bed for 2 weeks. Never saw a medical professional, because they would want to x-ray (it might have broke, it was much more painful than a normal dislocation to me, and swelled huge for a while) and I'd be stuck with a $3 - 5k bill minimum just for that, combined with any treatment, and I'd laugh if they'd want me in physical therapy for it.
So it isn't just about not haivng a doctor to say 3 bic macs a day is bad for you, it is that in most other places people do see their doctors, regularly, and for most issues, beucase it doesn't bankrupt them. That adds up over a lifetime.
Check out the unit cost differences here:
http://voices.washingtonpost.com/ezra-klein/2009/11/an_insur...
"But I think the biggest single driver is our fee-for-service system that rewards volume instead of value and quantity of medical services instead of quality. And as a result, we end up doing a lot of things that cause more harm than benefit for patients."
Also:
"What that dramatic variation tells us is that there's a lot unnecessary medical care that's being delivered and a lot of room to eliminate some of that wasteful spending."
Which is why almost every country outside of the US has a lower standard of care than we do. I'd be fine if we had a "minimum safety net" which covered catastrophic care, but thats not what was put into law. I also think a government mandated requirement to purchase a commercial product is probably not a good thing.
You just like to make up shit I see. Every country that provides public healthcare has a higher standard of care than we do because for 10's of millions of American's there is no care at all beyond emergency care. People die daily for lack of health care in this country, to call that a higher standard than countries with public healthcare is beyond absurd. Our system has a fantastic standard of care for those with money, it has shit for care for the rest.
Uh, where do you get that from? The JAMA study, one of the most comprehensive such studies done, concluded that the US health care outcomes are far worse than comparable nations, yet we pay significantly more for it.
The biggest reason we pay more is that provider costs are much higher than the GDP-adjusted average. $500,000,000,000 more. (And before you say it, that's factoring out defensive medicine and the results of tort reform.) A lot of that has to do with insurance companies inability to negotiate reasonable rates with the providers. And of all the insurers in the US, which is the only one that can and does negotiate reasonable rates? Medicare.
Maybe if you live in opposite world; in this world, it does exactly the opposite.
Like you, no thanks.