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February 05, 2021 at 09:54 AM
Sidecar Health now has more cash it can use to offer a new, high-tech form of fixed indemnity health insurance.
The Los Angeles-based company has raised $125 million from investment companies through a new round of funding.
The company has raised a total of $175 million since it came to life, in 2018, and the latest round of funding gives the company a value of about $1 billion, the company said last week.
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Drive Capital of Columbus, Ohio, was the company that invested the most cash in Sidecar Health through the latest round of funding.
Sidecar Health has started out by issuing policies that pay the insureds a fixed amount of cash when the insureds use one of about 170,000 covered medical services or prescription drugs.
Before the 1970s, most U.S. health insurance policies were indemnity health insurance policies.
Managed care plans, or plans that helped enrollees get discounts on care from doctors and hospitals in a plan provider network, began to crowd out indemnity plans in the 1970s, and they dominated the market from the 1980s through the 2010s.
Indemnity policies have been starting to make a comeback since 2014, because the Affordable Care Act exempts indemnity health insurance policies from the ACA underwriting, benefits and pricing rules that apply to major medical insurance coverage.
Sidecar Health has designed its policies in response to how federal regulators have interpreted the ACA indemnity health insurance rules exemption.
Sidecar Health has told consumers that one of the seemingly old-fashioned characteristics of indemnity health insurance, the lack of a provider network, may seem like a strength to some insureds, because of the lack of any pressure on insureds to see in-network providers.
Sidecar Health has used a mobile app to make the lack of network-contract-based care pricing more palatable, by helping enrollees see what’s covered, what the indemnity payment will be for a given service, and what other Sidecar Health insureds have paid for a given service from a specific provider.
Sidecar Health enrollees can use a Sidecar Health Visa card to pull cash for payments directly from their claim accounts. In some cases, that feature can help enrollees qualify for doctors’ “self-pay” rates.
The company has a broker information form on its website.
Sidecar Health is now operating in 16 states.
The company said it will use the new cash it has raised to do business in more markets, and to develop a health insurance policy that will comply with the ACA standards for individual major medical insurance policies. Sidecar Health hopes to sell individual major medical coverage, for 2022, through the ACA public exchange system starting in the fall.
After Sidecar Health enters the individual major medical market, it will develop a product aimed at self-funded employer health plans, the company said.
In other insurance deal news:
Plume Inc., Denver, has raised $14 million to expand a care coordination and health care services program for the transgender community.
The company gives members access to the services, including home delivery of hormone medications, through providers who can be seen through a mobile app.
The current charge for the service is $99 per month.
Craft Ventures invested the most cash through the current round of funding.
Plume executives said they plan to use the money to expand into new markets and hire top trans health specialists.
Anthem Inc., Indianapolis, has agreed to acquire MMM Holdings LLC — one of the largest health coverage providers in Puerto Rico — from InnovaCare Health L.P., White Plains, New York.
Anthem is a health insurance giant that provides or administers health coverage for about 43 million people.
InnovaCare runs Medicare plans and Medicaid plans, and it owns health care delivery companies.
InnovaCare’s MMM Holdings unit is the parent of MMM Healthcare LLC. MMM Healthcare runs a Medicare Advantage plan in Puerto Rico that has about 267,000 enrollees.
