Company raises $3.5 million in seed funding for proprietary technology that modernizes and simplifies supplemental health insurance
LifeRaft, a new insuretech company that makes simple, flexible and cost-effective supplemental health insurance products, came out of stealth mode today and launched its platform to offer people supplemental health options and solutions designed for real life. LifeRaft is building products that sit alongside a subscriber’s traditional health plan to help policy holders see the doctors they need, access the most appropriate treatments and make medical care more affordable.
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In addition to launching the LifeRaft platform, the company also announced that it has secured $3.5 million in seed funding. The round was co-led by Costanoa Ventures and XYZ Venture Capital. Funds will be used to further develop product offerings, expand reach and grow the LifeRaft team.
“LifeRaft is modernizing a sector that hasn’t been touched in a meaningful way for the last 30-plus years,” said Ross Fubini, founding partner of XYZ. “More importantly, LifeRaft is doing this in a way that can have a massive impact on people’s lives. No one should have to choose between quality medical care and financial ruin. LifeRaft makes it simple — find the best solution for your case, period, and the money will be there.”
Cause for Concern
Medical debt places an enormous strain on Americans every year. Currently, 66% of all U.S. bankruptcies are tied to medical debt issues1, and 137 million Americans face financial hardship due to medical bills1. Medical costs also account for 25% of all US credit card debt1 while the majority of consumers worry about their ability to pay an unexpected medical bill2.
“The problems affecting healthcare cut across all layers of our society. Unless a person can afford to pay for just about anything out-of-pocket, traditional health insurance is no longer enough,” said Ian Blumenfeld, co-founder and CEO of LifeRaft, who understands the challenge firsthand. “People talk about how healthcare is broken, but until someone goes through an actual experience in which they are facing a serious medical issue and have to try to navigate an arcane and byzantine system to get care, the tragedy of what’s happened in healthcare doesn’t really sink in.
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“Even after spending the bulk of my career at the intersection of health and technology, and even with substantial financial resources available, I found accessing and paying for care confounding. I knew we had to create a better way to stop people from struggling unnecessarily,” added Blumenfeld.
He recruited Nimish Shukla and Joyce Noah-Vanhoucke to help execute this vision and develop the platform. The team previously worked to build Clover Health’s data platform and best-in-class automated risk engine, Blueprint Income’s first end-to-end digital annuity enrollment platform and marketplace, Kaggle’s competitions platform and SimplyCredit’s novel credit card refinancing solution.
A Modern Solution
This team of technologists, insurance and payments experts, healthcare and marketplace workers set out to offset the complexity, rigidity and cost of the current system by creating reliable safety nets that work for real life. LifeRaft leverages its proprietary research and new technology platform to deliver insurance products that cover consumers for adverse health outcomes, such as hospitalization, acute medical conditions and complications that require specialized medical treatment. The benefits from these policies go directly to the respective policy holders in cash, who can use the money for whatever they need: shrinking their out of pocket costs, paying to see an out of network specialist or even covering extra childcare. All of LifeRaft’s core operations are digital and automated, making the purchasing and enrollment process quick and seamless.
Although not a replacement for traditional health coverage, LifeRaft’s products add significant value during periods of high medical need; they are simple, flexible and cost effective. They also put the policy holder in control, rather than relying on a health plan to dictate outcomes.
“Healthcare spending has skyrocketed over the last 20 years due to rising costs in hospital stays, increased specialist visits and new, expensive treatments for a range of diseases,” noted Mark Selcow of Costanoa Ventures. “LifeRaft takes on the health expense monster, relieving the financial stress for patients so they can focus on getting better, rather than how they will pay their hospital or specialists’ bill.”
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