The healthcare tech boom continues, as one of the most-heralded consumer insurance comparison startups was acquired by an insurance services firm hungry for growth.
Tampa-based Health Insurance Innovations has purchased HealthPocket, the company beyond the consumer comparison website of the same name, for $32 million in cash and stock.
Founded in 2012 by former executives of eHealth Insurance, HealthPocket has had consumers as its primary target, offering the ability to "compare every health insurance plan in one step," with searches by provider, city and payer, from exchange plans to group policies to Medigap.
HealthPocket has also come to inform the debate over post-Affordable Care Act health insurance with data-driven studies on premium variation, cost-sharing and provider networks. One study last June found that two of the leading online private exchanges offer fewer options for consumers than the subsidized marketplaces.
Health Insurance Innovations says it wants to merge its health plan development, virtual-administration and agent distribution with HealthPocket's "powerful big-data-aggregation" -- a "game-changing technology," as a media release put it, that "for the first time, provides free, one-click access for consumers to review" on-and off-exchange plans.
"The incorporation of HealthPocket into Health Insurance Innovations fits with our growth strategy of continued innovation of unrivaled products and technology solutions within the insurance industry to further enhance our competitive advantage," said Health Insurance Innovations CEO Mike Kosloske in a media release.
Kosloske, an insurance industry veteran who's parents and grandparents ran a health plan administration business, founded Health Insurance Innovations in 2008 -- trying to pioneer the "quote, buy, and print" model of online insurance sales -- and took the company public in February 2013.
"This transaction will significantly increase leads, drive sales and enable us to more swiftly expand into lucrative market adjacencies such as the $402 billion Medicare marketplace, the $35 billion ACA segment of individual major medical and the $220 billion employer-sponsored market," Kosloske said.
HealthPocket.com's founders, former eHealth executives Bruce Telkamp and Sheldon Wang, started the company in part because they thought Americans pay too much for health insurance that doesn't often fit their needs. Detailed information on available health plans in a given market has tended to be "suppressed," said Telkamp, HealthPocket CEO, in 2012.
"Most Americans overpay for health insurance and the plans they choose often don't meet their unique needs," Telkamp said in a media release. "Having the resources of HII behind us will allow us to further accelerate our technology investment and rapid growth in consumer utilization."