SimplyInsured (YC W13) raises $750K to simplify health insurance

http://venturebeat.com/2013/10/02/simplyinsured-aims-to-put-health-insurance-into-terms-anyone-can-understand/

by vivekajayshah • 13 years ago

93 50 13 years ago

toomuchtodo4• 13 years ago

How is SimplyInsured going to deal with the long-term move of health insurance towards single payer?

bifrost3• 13 years ago

Hopefully they figure out how to stop it. Single payer is a horrible idea and generally lowers the standard of care for everyone.

toomuchtodo4• 13 years ago

....which would explain why every first world country uses it except the US?

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.

gnaritas3• 13 years ago

Hopefully they figure out how to stop it. Single payer is a horrible idea and generally lowers the standard of care for everyone.

Maybe if you live in opposite world; in this world, it does exactly the opposite.

mjn3• 13 years ago

Given the glacial speed of reform in the U.S. (something like these new exchanges have been in the works since Nixon proposed a similar system), I would put that fairly far down the list of risks a small startup should worry about. A much bigger risk imo is just whether the value-add of their tools over the official state websites will be enough to gain traction.

ams61103• 13 years ago

Hard to imagine a motivated startup NOT being able to offer more value. State-run websites almost uniformly have abysmal usability, are slow, and are ugly. Sure there are exceptions but I think there will always be a lot of niches, or even bigger openings, to fill. And when you're talking about a market that is going to be compulsory for every adult, even a niche can be quite rewarding.

pbreit4• 13 years ago

I don't think there's a move to single-payer in the US. ACA didn't reduce the number of payers at all.

daguar2• 13 years ago

The key question here is how much additional value-add does SimplyInsured provide over the online marketplaces being set up under the Affordable Care Act.

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]

nhashem• 13 years ago

I'd argue the ACA will enhance the market for SimplyInsured. Yes, for an individual who wants a basic policy, Covered CA will probably be sufficient and they won't need more help than that. But there are dozens if not hundreds of edge cases.

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.

mjn3• 13 years ago

I agree on the last point: ACA probably actually helps them by making this kind of analysis possible to automate, since it gets the plan data into some kind of commensurable, analyzable form, and simplifies the answers to all kinds of eligibility questions. Once you have a standard format for health-insurance offerings, one analogy could be with air travel, where people build sites like Kayak and Hipmunk on top of ITA's systems. That isn't possible to do adequately if every health plan has its own custom set of terms written in English/legalese.

tednaleid• 13 years ago

I think that there's definitely room for improvement in this space as well as a lot of money to be made because the public exchanges so far are kind of terrible in their usability and access. They will probably improve, but with the lock-in they currently have, there is only incentive to improve enough that the complaints slow down. They get no additional profit for actually making things any better than "possible".

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/

vivekajayshah2• 13 years ago

Check out our blog post here: http://blog.simplyinsured.com/what-startups-need-to-know-abo...

The chart under Question #2 - answers your question.

downandout• 13 years ago

They may find themselves with a bigger market than one would think. Correct or not, the general perception of the exchange-based plans is that they are nothing more than extremely limited HMO's (having looked at the plans, this actually seems to be the reality, at least in Nevada). That negative perception, combined with the fines for not having insurance, along with the end of underwriting, will probably lead to a significant spike in people looking to buy private health insurance away from the exchanges. Another large group of people that will refuse to participate in the exchanges will be those that are ideologically opposed to the idea of Obamacare, and those that have grown distrustful of the government's use of data in the wake of the NSA scandal.

fpgeek• 13 years ago

I completely agree that the key question for SimplyInsured is how much value they can add once the decent exchanges are up and running. That's why I'm surprised that they've been focusing on California rather than Massachusetts.

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.

briandear• 13 years ago

I'm pretty confident that SimplyInsured's IT would be a huge improvement over the continual problems with the technology of the exchanges. The private sector is far better equipped to actually deliver on the technological promises made by the exchanges. The government is always years behind technologically due to the procurment process. The only reason the NSA has the advantages they do is because much of the technology they use is classified and this not open to potential competition.

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.

Scotthm• 13 years ago

The portals will be decent for individuals who enroll, but for small companies, they are a joke.

Splendor• 13 years ago

This appears to only be value to businesses who aren't interested in self-funded policies.

rdl• 13 years ago

It would be nice to know if I should get a Bronze HSA or a Gold PPO based on 1) my medical billing history for the past 1-3 years 2) my past and projected income 3) potentially, my current medical status and good projections about that.

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?"

SimplyInsured (YC W13) raises $750K to simplify health insurance

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