A local insurtech startup is transitioning to a new name and branding following a slight shift in its business strategy.
Arrow Health is now Kyndly Benefits, a name that better reflects the Vogt Award-winning company's compassionate approach to helping people navigate the health insurance marketplace, co-founders Waleed Bahouth and Erik Anderson recently told me.
As KY Inno reported last year, Arrow Health, founded in 2022 by the two former Humana Inc. execs, developed a fixed-budget insurance product that allowed small businesses to provide their employees with health insurance at a fraction of the cost of a traditional group health insurance plan.
In January, it was named among our Startups to Watch in 2023.
Bahouth, CEO, said while they were successful in getting a lot of initial customers with that model, the co-founders recognized accessing insurance needs to start on an individual level.
"We found that one of the biggest challenges is helping individuals themselves, not just the business, but the individuals themselves navigate to the best health plan for them," Bahouth said.
In Kentucky alone, nearly 80% of the population is eligible for a subsidy if they choose a plan on through the Affordable Care Act (ACA) — informally known as Obamacare — marketplace.
But many don't know that those subsidies could make insurance coverage free or almost free, Bahouth explained. It's also difficult for people to access those plans through kynect, the state-run marketplace portal, due to the technology itself and the terminology used on the platform, he contends.
In 2023, 37% of Kentuckians are covered by Medicaid, whereas only 1.4% of the state's population has some time of ACA marketplace plan compared to 4.9% of all Americans, according to data from CMS Medicaid and Chip Enrollment. About 7% of the state's residents are uninsured.
That's why Kyndly Benefits is taking a new direct-to-consumer strategy and developing a product called Kynd Choice, an interactive health plan enrollment tool.
The product will offer automated health insurance enrollment and decision support to help individuals — such as gig economy workers — overcome barriers to enroll in marketplace plans.
The timing is ripe for Kyndly's new focus, its founders said, as the federal health emergency that expanded Medicaid coverage is going away. About 240,000 Kentuckians will lose health coverage over the next 12 months, Bahouth said.
Kyndly Choice is expected to launch mid-summer, corresponding with the unwinding of emergency Medicaid benefits.
Anderson, who just recently went full-time in his role as president of Kyndly, was director of benefits at Humana, where he heard the conversations people had about figuring out what plans made sense for them.
"Really, what we're developing at this point in time is the decision-support tool that helps individuals make that determination against the sea of choices ... trying to whittle down [the answer] to 'What's the best opportunity for me and my family for this year?'" he said.
But while Kyndly is prioritizing its direct-to-consumer approach, it doesn't mean the business-to-business piece of its model is disappearing.
"In the long term, we think there's going to be a huge opportunity there as more companies shift to an individual plan approach because their group health plan has just gotten too expensive," Bahouth said.
Kyndly, which has been bootstrapped thus far, is currently raising $500,000 in a preseed round. In addition to building out the product, the funding will be used hire a chief technology officer and a customer service leader.
"I will say the response we've had so far from individuals has been very positive with a lot of interest," Anderson said. "We feel very optimistic that we're going to be able to obtain what we need for this round in a reasonable amount of time."
Notably, while neither of them are from Louisville, Bahouth and Anderson say they want to scale the company here.
"We're very committed to keeping the company local ... really to benefit the local community as much as possible," Bahouth said. "We both spent a lot of time at Humana and just have seen kind of how much that can mean to a community when you're building locally in terms of employees, investors, customers — everybody kind of benefits from that ecosystem.
"And so far, the receptivity that we've had from investors has been very positive, I think, in part because they may buy into both kind of a long-term vision, seeing where the industry is headed. And also pretty strong fundamentals underneath it."
