Retiree Health Technologies (RHT), an early stage company located just outside Chicago, is seeking a total of $960K (in 2 tranches) to develop technology that would align Medicare insurance with the changing retail environment. The market entering Medicare primarily consists of two growing, increasingly tech savvy segments new to retail health insurance: turning 65 retirees coming off a group health benefit and caregivers. Retail shopping, powered by companies such as Amazon and Google, was already moving towards digital engagement. The COVID pandemic – with its social distancing restrictions – is only going to accelerate existing trends. However, advances in retail technology have ignored this market. Our goal is to build the “first in” technology that matches the marketplace with these emerging consumer trends.
RHT was formed in April 2019. To date we have focused on assembling a team, assessing the market, product development, and constructing and testing a first order demo. We are self-funded and now are seeking our first outside cash infusion to cover updating our technology, installing and testing a beta with a partner, and building a production version of our technology. We anticipate a second round of funding as we move to marketing and installing our production version, requiring working capital.
We represent a new Medicare sales paradigm: viewing the customer in the context of the digital retail revolution. With 10,000+ increasingly tech savvy Boomers turning 65 every day, growth is unprecedented. Employers dropping retirement benefits are creating a new class of retail customers. At the same time, online companies like Google, Amazon and AirBnB are driving a revolution in retail shopping behavior. This market also includes another class of younger, tech savvy customers looking for solutions: family caregivers. The Bureau of Labor Statistics (2018) estimates a total of 35 million caregiver families; of these, 7 million care for an aging parent.
The current marketplace treats the transition to Medicare like another insurance benefit, rather than a unique inflection point. However, moving to Medicare, where the retiree has little or no HR support, is a complex and emotional retail transaction. Structurally, the existing sales process is high touch brokers and telemarketers. There are digital solutions, but these are focused on providing data rather than offering decision support. Some new players are starting to emerge to try and change this paradigm (such as MyMedicareBot), but tend to treat the transition to Medicare like any other employee benefit – presenting data rather than engaging the consumer to drive a decision. The disconnect with the market is that retirees have neither experience with Medicare nor HR support to help explain the options.
Because advances in retail technology have ignored this market, there is a disconnect (a classic economic market failure). Existing online shopping tools are complicated, with little attention paid to technologies such as AI and creating an instinctive UX. The consumer is, understandably frustrated and overwhelmed. The Motley Fool (October 2019) reported that over 60% of retirees “do not fully understand their Medicare benefits.” COVID – with its social distancing requirements - further undermines the traditional high contact sales model.
Retiree Health Technologies is looking to disrupt the marketplace by bringing the transition to Medicare inline with the digital retail revolution. We understand that layering COVID and social distancing on top of this retail revolution is going to quickly drive additional changes. The Medicare sales process is going to have to go the route of the routine physician office visit, where technologies like Teladoc, Zocdoc and Doxy.me are changing the paradigm.
We are focused on the front end of the Medicare transition – driving a decision. Given the latest developments around COVID, we are looking to push our solution a step further by integrating real time face-to-face interaction. This is more than “slapping” Zoom onto our website; it involves reengineering to fully integrate the experience. RHT started by building a demo integrating AI and an instinctive CX, with a chat function. We want to be able to establish a real time interaction with a virtual broker.
RHT is a B2B2C initiative. Our targeted customer base is health plans, insurers with Medicare business, and large broker organizations (FMOs). Right now, the state of the technology field consists of companies like Connecture which construct front end sales systems; we are clearly an improvement. There are also companies that offer some aspect of the Medicare enrollment process, like application processing (like SunFire Matrix), but do not focus on the front end consumer interface. Once we establish our credibility, RHT could potentially partner with one or more of these companies to jointly offer an end to end solution.
We are seeking an investment in two tranches. Tranche 1 is $560k to develop, install and test a concept beta, and develop our first production version for the mass market. The second tranche - $400k – is to construct, market and install our product with the first round of outside paying customers. We expect to become fully operational in 2021.
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