When Grace Gee and Eugene Wang, two math undergraduates at Cambridge, Mass.-based Harvard, analyzed data from health insurance marketplaces, they uncovered a troubling trend: Between 2014 and 2015, the largest insurance company in each of the 34 states they analyzed increased premiums by more than 75 percent compared with smaller insurers, according to The Atlantic.
Rising premiums didn't seem to correlate with increased benefits for consumers, they found. Ms. Gee and Mr. Wang's research was published in a Cambridge-based journal, Technology Science, and has been cited in Congressional testimony, according to the report.
Despite their findings, Ms. Gee and Mr. Wang knew consumers would have a hard time including this analysis into their comparisons of different insurers when selecting a health plan. So, they created a startup with a solution.
Their company, HoneyInsured, launched last week. Here are five things to know about the new company.
1. HoneyInsured is a website that connects to the HealthCare.gov back-end API, which enables consumers to order insurance from it as they would from the official federal exchange site. More than 52 of these "web brokers" exist, often differentiating themselves as a simpler avenue for purchasing health plans. For instance, instead of asking people to answer numerous questions upfront, they only ask for the most necessary information. In the last two years, HealthCare.gov has incorporated a similar system, according to The Atlantic.
2. HoneyInsured is unique because at the end of the information-gathering process, it recommends a health insurance plan for each customer. It is also unusual in that it shows the size of a plan's network. Like HealthCare.gov, consumers can see if specific physicians are included in a certain plan.
3. Other features included on HoneyInsured's website simplify comparison shopping. On its page of suggested health plans, the website will also tell users how much they would additionally pay out of pocket under each plan for certain conditions, such as a broken limb, depression or cancer. It also organizes plans by different sources of medical costs. For example, if most of a patient's medical costs come from prescription drugs, HoneyInsured will name plans with lower drug co-pays, according to the report.
4. The startup company will take a commission for selling insurance, but commissions aren't factored into the algorithm that recommends plans for consumers, according to the report.
5. HoneyInsured is now open to users in Texas, Florida, Georgia, Ohio, North Carolina, Virginia, Pennsylvania and Missouri.