Bind, the Minneapolis-based startup pushing what it calls "on-demand" health insurance, said it has raised $70 million to fund national expansion plans.
Backers include Ascension Ventures, a St. Louis-based fund connected to several large nonprofit hospital systems, and UnitedHealthcare, the Minnetonka-based health insurance giant. Funding also comes from Lemhi Ventures, where Bind's founder Tony Miller is managing partner.
Bind is not an insurance company, but works with employers to structure health benefits so that workers buy coverage for certain ailments only if they need the services.
"If you listen really well to what consumers want, they want something that looks like on-demand health insurance," said Miller, who was one of the founders of Definity Health, a company that helped pioneer the "consumer-directed health plan" movement that led to health savings accounts.
Ascension Ventures, one of the investors being announced Thursday, is a health care venture firm with more than $800 million in capital under management that invests on behalf of 13 health systems. Ascension Ventures was founded in 2001 by Ascension, one of the nation's largest Catholic and nonprofit health systems.
"The health insurance market is due for its next innovation, and we believe that's Bind," said Ryan Schuler, managing director of Ascension Ventures, in a statement.
In a statement, UnitedHealthcare said: "We look forward to working with Bind to create greater transparency into health care costs and help people choose the services they need."
Previously, Bind raised about $12 million in startup funding, according to a company spokeswoman.
Bind currently employs the equivalent of about 85 full-time employees and expects to grow to 150 by year's end, Miller said. Currently, about 2,000 people have coverage that's structured by Bind, Miller said, adding that the number is expected to grow to 100,000 people next year.
Workers pay for a core health plan that covers what most people need. Add-in coverage takes care of a few dozen specific services like knee arthroscopy or bariatric surgery that people buy only as needed, for three months at a time. Subscribers pay premiums and copays, but no deductibles or "coinsurance," which are tough for consumers to calculate.
"They want [conditions] covered when they need them covered, and as their needs change they want to be able to flex their coverage," Miller said. "They also want price certainty — they want to know what everything is going to cost before they use it."