Note: This post has been updated from an earlier version with comments from HealthCare.com CEO Howard Yeh. Just one day after the Trump Administration announced a proposed rule to make short-term health insurance more widely available, health insurance comparison business HealthCare.com has announced plans to acquire startup Pivot Health, a health insurance business that specializes in short-term health insurance and zero deductible plans. It marks the first acquisition for the business. The terms of the all-cash deal were not disclosed. For clarity, Pivot Health, based in Scottsdale, Arizona, is not to be confused with the Seattle-based healthcare recruitment business that shares the same name. Also, HealthCare.com is a different business than the federal government’s health insurance marketplace Healthcare.gov. Interestingly Pivot Health founder and CEO Jeff Smedsrud previously led HealthCare.com from 2014 to 2016. Pivot Health’s insurance products are marketed both direct to consumers and through a group of independent, licensed insurance agents and through online insurance brokers. Pivot will continue to operate independently after the deal is closed. Although the companies share a common founder, HealhCare.com cofounder and CEO Howard Yeh said they also had a relatively new business relationship, working together on presenting plans from Pivot Health onto HealthCare.com’s online comparison website, in an email. Yeh said the deal fits into the larger trend of strategic acquisitions in the health insurance space in a couple of ways. The deal also reflects the broader consolidation happening across health IT, particularly to support health insurers. Last year, Cigna acquired Brighter Health, a digital health business designed to make it easier for people to find and book appointments with a dentist. The company’s program is also intended to help people better manage costs by finding dentists in the user’s network. In 2016, GetInsured acquired Array Health in a deal to give health insurers an online exchange that employers can use to help employees navigate insurance options. Earlier this year French insurance giant Axa Group acquired Chicago-based employer benefits tech business Maestro Health to get a better foothold in the U.S. health insurance market. Asked if the Trump administration’s push to add short-term health insurance plans factored into the deal, Yeh said its decision wasn’t guided so much by policymakers as the reality on the ground. …our motivation comes more from the interest being shown in the market from consumers looking for different ways to find affordable coverage. The market for non-marketplace plans has been growing with each successive year. ACA is still the largest part of the individual market, and is the right type of coverage for those who can afford it or those who need the essential benefits. We present ACA options during the open enrollment period, and we’ve written considerably more content and have spent more resources building comparison tools around ACA plans than any other plan type. We’re going to continue to show them. We have multiple enrollment to help serve that market. There’s a much-needed place for them (my personal opinion) for them. However, there are gaps in the individual health insurance market, whether they are affordability gaps, geographic gaps in areas with limited plan options, or seasonal gaps outside of open enrollment. There’s a market for coverage to fill in these gaps, and we want to make sure consumers see their options. Photo: crazydiva, Getty Images
Arizona company HealthCare.com is set to acquire US-based start-up Pivot Health, which specialises in offering short-term health insurance policies. No financial details were released. Both companies were founded by current Pivot CEO Jeff Smedsrud, and the latter firm will continue to operate independently after the acquisition closes. The Trump administration recently unveiled a proposed rule to increase the availability of short-term health coverage.