Insurtech Bind bagged $105 million to accelerate its expansion into employer-sponsored insurance
- On-demand health insurance startup Bind bagged $105 million to accelerate its expansion into employer-sponsored insurance.
- And low-cost insurtechs like Bind will be most appealing to younger cohorts.
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The on-demand insurtech plans to use its fresh cash to accelerate expansion to over 30 states by the end of 2021. For context, the startup began by providing its self-funded Administrative Services Only health plans to employers like Best Buy and Medtronic—and quickly grew to 100,000 members. It currently operates as an affiliate of UnitedHealthcare (UHC), which gives members access to in-network UHC providers.
Health insurtechs that boast low pricing are attracting more consumers—which should help improve health outcomes as more people in the US forego care amid the pandemic.
- Bind's goal is to rebuild health insurance to make it more intuitive and affordable. It touts $0 deductibles, zero co-insurance, and in-app tools to see what's covered in a doctors' visit before making an appointment, and the option to tack on coverage for non-urgent treatments throughout the year when needed. And that model seems to be paying off: Bind says its business grew eight fold in the past year alone.
- And it isn't the only insurtech boasting low-cost health insurance as a way to lure enrollees. Oscar Health plans to offer $0 virtual care in 2021 and has amassed over 420,000 members since its launch, for example.
- Affordable care options like these could incentivize consumers who are delaying care to visit their doctor, which should generate savings for employers—Bind's target customers. More US individuals are delaying care during the pandemic, which could leave new conditions undiagnosed and drive adverse health outcomes in the long run. And cost is a major factor inhibiting consumers from seeking care: One-third of New York City residents say they're unable to get care during the pandemic because they can't afford it, per a September NPR and Harvard Survey. That means an economical health insurance option should incentivize people to step into the doctor's office, which would improve health outcomes—and in turn, curb employer spending: Bind data from August shows that its health plans cost employers and employees 23% less than the average benchmark.
However, we think low-deductible plans like Bind's will likely only bode well with younger, relatively healthy cohorts, since add-in costs for procedures can vary significantly. Unlike traditional health insurance plans, low-cost ones like Bind's don't require a patient to pay their way through a deductible before their coverage goes into effect.
However, this comes with a downside: Patients have to pay additional "add-in" fees for unexpected procedures, which can fluctuate depending on the procedure or provider: For example, a lumbar spine fusion can vary from $5,000 to $10,000, according to KHN. So, while we think it makes sense for generally healthier consumers to opt for insurtech plans like Bind's, we expect that older patients—who are at risk of having chronic conditions, which can require more procedures—may steer clear of these options.
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