Empowering Choice: Thatch and a new era of freedom in healthcare
In the world of employer-sponsored health benefits, which covers approximately 155 million Americans, the status quo is often accepted as unchangeable - an entrenched system where one-size-fits-all solutions dominate, and everyone loses a little in the process. Employers grapple with rising costs and administrative headaches, while employees struggle to find plans that meet their individual needs, only to lose those benefits every time they change jobs. But what if there was a better way, one that offered flexibility, control, and portability? Enter Thatch, a company that’s turning the traditional approach to health insurance on its head.
Reimagining outdated systems has already transformed other industries, such as retirement benefits. The shift from pensions to 401(k) plans addressed rising costs and the evolving needs of a mobile workforce, giving employers financial predictability and employees greater control over their savings. As healthcare costs continue to spiral, consuming an unsustainable portion of the GDP, a similar shift is underway.
"Thatch abstracts away all the complexity.... From the moment an employer decides to explore ICHRA to the time an employee selects their perfect plan, Thatch makes the experience seamless, intuitive, and, dare we say, enjoyable."
Over the past five years, the average cost of employer-sponsored family health insurance has surged by approximately 22%. In contrast, the individual insurance market, strengthened by the Affordable Care Act (ACA), has shown a different trajectory. As the ACA matured, the size of the risk pool expanded, which has played a crucial role in driving down costs for individual plans. Additionally, there has been a notable increase in insurer participation within the individual marketplace. This rise in carrier participation has fueled greater competition, further contributing to the reduction in costs. As a result, individuals now have access to more affordable insurance options and a wider variety of plans in their local counties. Introducing a new regulation, Individual Coverage Health Reimbursement Arrangement (ICHRA), allows employers to set tax-free contributions towards employees' health insurance premiums and other medical expenses.
"Behind Thatch’s innovative approach is a team uniquely equipped to tackle the complexities of the healthcare and insurance industries."
But the real magic of Thatch isn’t just in the regulation it leverages - it’s in how the company has simplified what could be a complicated process. Thatch abstracts away all the complexity, converting budget selection, enrollment, and insurance payments into a few clicks. From the moment an employer decides to explore ICHRA to the time an employee selects their perfect plan, Thatch makes the experience seamless, intuitive, and, dare we say, enjoyable.
For employers, Thatch offers a way to control costs without sacrificing the quality of benefits. By setting aside tax-free budgets for their employees, they can offer a truly valuable benefit—something that meets their employees where they are and gives them the flexibility to choose what’s best for them.
For employees, it’s a game-changer. No longer are they locked into plans that don’t cover their specific needs or forced to spend out-of-pocket on care that should be included. Instead, they have the freedom to choose plans that make sense for their health and their lives, whether that’s ensuring their doctor is in-network or selecting a plan that better manages a chronic condition.
Behind Thatch’s innovative approach is a team uniquely equipped to tackle the complexities of the healthcare and insurance industries. Chris Ellis, Thatch’s CEO, brings a rare blend of healthcare expertise and customer empathy. His journey from cancer researcher to entrepreneur was sparked not just by a professional understanding of the industry’s pain points but also by personal frustration with the system's inefficiencies. This blend of professional insight and personal passion drives Thatch’s mission to make health insurance work better for everyone.
Equally, his co-founder Adam Stevenson, whose background is at Stripe - where he played a pivotal role in building scalable, user-centric financial products, has been instrumental in shaping Thatch’s technical foundation. Adam’s ability to blend deep technical knowledge with a keen understanding of user experience has been vital to Thatch’s success in creating a product that’s as easy to use as it is powerful.
Index Partner Jahanvi Sardana with Thatch co-founders Chris Ellis and Adam Stevenson at the Index San Francisco office
Chris and Adam have assembled a team of top talent, pulling in experts from across fintech and healthcare industries to ensure that every aspect of Thatch is executed with excellence.
"In a world where health insurance often feels like a burden, Thatch proves it doesn’t have to be."
Moving away from the employer model will change the incentive structure of the healthcare industry. As competition in the individual market heats up, insurers will be compelled to innovate and develop products that prioritise the needs of individuals, not employers. When employees can carry their benefits from one job to the next, insurers gain a strong motivation to focus their members' long-term health, investing in preventative care and personalised solutions. Insurers can dramatically improve member retention while ultimately improving healthcare outcomes for millions of Americans.
In a world where health insurance often feels like a burden, Thatch proves it doesn’t have to be. With a powerful vision, a mission-driven team, and a product that makes a difference, Thatch is poised to become synonymous with a better, more human approach to health benefits. And that’s a change we’re thrilled to be a part of.
Published — Sept. 5, 2024