The news: Digital health startup Sesame is rolling out Sesame For Employers—a low-cost health benefits offering for small and medium-sized businesses. Before this, Sesame primarily offered direct-to-consumer (D2C) health services where uninsured customers could pay upfront for care.
A key differentiator: Sesame for Employers allows employers to customize health benefits for their employees for as little as $20/employee/month and claims to be 95% cheaper than the cost of insurance.
How does it keep its prices low? Sesame’s cash-pay model sidesteps insurance altogether and it has its own network of 16,000+ healthcare providers.
Because of this, it can keep its operating margins low since it doesn’t have to pour money into all the administrative functions traditional insurers do (like negotiating prices with providers and processing claims). Instead, it offers a model that’s direct, transactional, and doesn’t require navigating an administrative maze to determine costs of care and what’s covered/not covered.
On top of care, last year, it launched its low-cost online pharmacy, where it’s offering around 200+ FDA approved generic medications for $5, free delivery across the US—no insurance required.
Why it could succeed: By targeting small and medium-sized employers, Sesame’s hitting a market segment that’s sometimes overlooked by larger employer-sponsored health plans.
Smaller businesses also have to scramble to meet demands of employees and turnover rates spike amid the Great Resignation: 8 in 10 employees said that healthcare was in the top three most important benefits, per Marathon Health’s 2021 survey of 1,100 US employees. That means employees will weigh health benefits heavily when considering staying or leaving a job amid the competitive job market.
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