Hixme aims to dismantle the group health insurance market

Hixme plans to replace group health insurance policies with its customised benefit plans based on the needs, preferences and lifestyles of individual employees. The California-based start-up, which launched this week, is targeting the 12 largest employer cities in the US over the next few years. 

Health benefits startup Hixme wants to transform how employers pick health benefits by shifting the responsibility to employees. In a phone interview with CEO Denny Weinberg (who was part of the founding team at WellPoint, which later became Anthem) he said its approach is a big shift away from the traditional employer benefits model.

It uses information about employees and their family members to present them with health insurance plan options and customized benefit options based on their needs, preferences and lifestyle.

Health benefits startups became a much larger investment priority last year and were the second biggest source of digital health investments last year, according to data from StartUp Health. Fifty-four deals raised more than $1.2 billion. Hixme was one of them. It raised $10 million in a Series A round led by Kleiner Perkins Caulfield and Byers.

“One reason we have runaway inflation in health insurance is that it has been a third party purchase,” Weinberg said. “When you are consuming something someone else is paying for you, people will [pay too much] and overuse it.”

Hixme shifted its focus at the time of the Series A. Weinberg said it went from a “very small local new idea” to a company building a solid technical foundation for larger employers with headquarters in California cities. A pilot of its initial model last year sought to identify and fix technical issues.

Weinberg claimed its company’s approach was the first for large employers that allows employees to leverage the power of personal ownership. It wants to make it easier for employers with staff who have varied risk profiles.

He said the rationale for its approach is that the share of total premiums paid by employees has increased at a rate 3 times higher than the increase in wages.

It plans to target the 12 largest employer cities over the next few years. This year, it plans to focus on employers in big cities in Texas, as well as Chicago or Atlanta.

Weinberg predicts that in 10 years, group insurance won’t exist anymore and companies like Hixme will support the new normal.

Photo: Flickr User Lauren Mcdonald

https://www.youtube.com/watch?v=far-quIGtxM