October 21, 2020

Bind enters employer market with new approach to health insurance

  • Bind, a startup that’s building a new kind of health plan, is becoming an insurer itself. It’s offering plans to fully insured employers who have more than 50 employees. 
  • Getting rid of deductibles and co-insurance, Bind’s “on-demand” approach instead informs members how much they’d expect to pay for a certain doctor’s visit, prescription or procedure. 
  • Bind will be available for companies in Florida effective January 2021, with plans to file to be an insurer in dozens of states between now and 2021.
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Bind, a healthcare startup that built a new kind of “on-demand” health plan, is getting into the insurance business. 

The move into health insurance will make Bind’s services available to more companies, particularly smaller ones. Previously, Bind administered health plans for big companies that pay for the costs of their workers’ medical care themselves, without purchasing health insurance.

Read more: We got a look at the slide deck of Bind, a startup that’s raised $70 million to upend the way we pay for healthcare

Bind will start offering insurance plans that take effect in January 2021 in Florida, and said it plans to file to be an insurer in dozens of states over the next few months.

About half of all Americans get their health insurance from an employer, and employers spend an estimated $880 billion on healthcare for their workers each year.

Read more: Inside the secret club that helps determine which healthcare startups blow up

How Bind works

Bind was founded in 2016 by Tony Miller, who previously started two companies that he sold to UnitedHealth Group. Bind has raised $142 million from investors including UnitedHealth, Lemhi Ventures (where Miller is a managing partner), and Ascension Ventures, the venture arm of the giant Ascension health system. The company is currently raising additional capital as part of its plans to become an insurer. 

The “on-demand” health plans that Bind offers look a bit different from the insurance that you might get through your work. They’re based based on the idea of making it easier to figure out how much your healthcare will cost ahead of time.

To do that, the plans ditch deductibles and co-insurance in favor of fixed amounts you know you’ll have to pay before going in for treatment.

Bind is hoping people pick cheaper ways to get care

Deductibles can require health plan members to pay thousands of dollars for medical care and prescriptions before their health insurance kicks in, while co-insurance requires members to pay a percentage of the total cost of care.

Bind displays information about treatment options and their costs in its app and online, and is hoping that individuals will tend to pick cheaper healthcare options that will provide care that’s just as good. 

So far, Bind says it’s been able to save money for the employers it works with and for their employees. The typical Bind member pays about $448 annually out of pocket for their care, according to the company. As of 2018, the average American spent about $1,150 out-of-pocket on healthcare annually.

When Bind’s compared its plans to others, the company’s found that the plans are typically about 10-15% cheaper than other available plans, depending on the market, Miller said.

The Affordable Care Act is Bind’s next market

“It isn’t just a health startup,” Miller said. “It actually is changing insurance design. Our products are different.” 

Bind currently covers 75,000 people, a number Miller expects to double in 2021. 

After entering the fully insured market, Bind is aiming to enter the individual exchanges established under the Affordable Care Act. That could happen as soon as next year depending on how Bind’s foray into the fully-insured employer market goes, with the intent of offering health plans starting January 2022, Miller said.

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