How health plan start-ups are disrupting the industry

Traditional health plans are getting hit with significant financial losses. These losses are largely attributed to individual products sold on health insurance exchanges created under the Affordable Care Act. While some private insurers proposed substantial premium increases to cover losses, others withdrew from certain states, or left the market altogether Traditionally, private insurers focus on employers as their primary membership channel, whereas this market requires sales directly to the consumer.

While individual insurance existed for years, a boost in direct-to-consumer products, fueled by ACA, has spurred dozens of start-ups looking to change consumers’ experience with the healthcare system. Some barely survive, some thrive, and others have failed. Those that failed, or that barely survive – including consumer oriented and operated plans (CO-OPs) – also had large losses in this market. For many, premium prices did not cover claim costs, and scaling for these new private insurers was a challenge. 

However, a number of start-ups have emerged with thriving, solvent businesses. We took a closer look at these start-ups and found four key differentiating factors from traditional insurers:

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Bright Health, Canopy Health Insurance, CO-OPs, consumer oriented and operated plans, Harken Health, Oscar Health, Slalom Consulting


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