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Health insurance tech startup taps Texas for its launch due to its large uninsured population

California-based Sidecar Health has rolled out its health insurance tech services in Texas. Images via sidecarhealth.com

The health insurance situation in Texas is anemic.

Last year, 17.7 percent of Texans lacked health insurance, according to newly released data from the U.S. Census Bureau. That's the highest rate of uninsured residents among all of the states.

The problem is even more acute in the Houston metro area. In 2018, nearly 1 in 5 residents of the region (18.6 percent) had no health insurance, the Census Bureau says. That's the highest rate of uninsured residents among the country's 25 most populous metro areas.

If you do the math, that translates into more than 5 million residents of Texas, including more than 1.3 million in the Houston area, who have no health-insurance safety net. A startup called Sidecar Health is setting out to reduce those numbers.

Texas recently became the first market for Sidecar Health's insurance plans, which it promotes as being "personalized" and "affordable." By the end of this year, the El Segundo, California-based company hopes to enroll at least 5,000 Texans.

Just as with subscription services like Netflix and Amazon Prime, a consumer can sign up for or cancel their Sidecar Health plan at any time. A member can lock in their Sidecar Health rate for three years.

Technically, Sidecar Health isn't an insurance company. Rather, it manages the insurance plans that it sells.

"Sidecar Health is different from traditional insurance in that we pay a fixed amount for any medically necessary service or prescription drug that you buy," the company explains on its website. "That means if your provider charges more than that fixed amount, you pay the difference. And if your provider charges less, you keep the difference."

Through Sidecar Health, a consumer can visit any healthcare provider, healthcare facility, or pharmacy they choose, as long as self-paying patients with credit cards or debit cards are accepted. This setup allows "complete transparency and control over healthcare costs," says Patrick Quigley, the startup's CEO.

"We make this possible by enabling our members to pay for care when they get it using the Sidecar Health payment card. Because doctors get paid immediately, they offer huge discounts. On average, it is 33 percent or more cheaper than what they charge big insurance companies," Quigley tells InnovationMap. "And because our members are doing the buying by swiping the card, they know what things cost. So you get true transparency and affordability — the way health insurance should be."

Through the Sidecar Health app, a member can see how much healthcare providers in their area charge, enabling them to compare prices.

"Our approach results in a truly affordable option for the millions of people left behind by the traditional model — those who don't qualify for a government subsidy but can't afford the cost of traditional plans," Quigley says in a release.

Sidecar Health is operating throughout Texas without any employees or offices in the state. The company sells its product directly through its website. On the website, consumers can educate themselves on available insurance plans before signing up online. Its Texas insurance plans are underwritten by Eatontown, New Jersey-based United States Fire Insurance Co., part of insurance conglomerate Crum & Forster.

Since its founding in 2018, Sidecar Health has raised $18 million in funding, led by San Francisco-based GreatPoint Ventures and Los Angeles-based Morpheus Ventures.

The startup's offering "is a great example of taking an otherwise complex process and making it simple, which is why Sidecar Health is such a game changer in health insurance," says Joseph Miller, managing partner of Morpheus Ventures.

Sugar Land and Pearland are experiencing a bit of a boom when it comes to population. Photo courtesy of Sugar Land Town Square

Two of the fastest-growing spots in the nation are right in Houston's backyard. Personal finance website WalletHub has crowned Sugar Land and Pearland among the 30 fastest-growing cities in the U.S.

WalletHub published its list of America's fastest-growing cities October 14. To come up with the list, the site compared 515 cities of varying sizes on 17 key measures of both growth and weakness over a seven-year period. Cities were judged in areas such as population growth, economic gains, and unemployment declines.

Sugar Land, No. 21 among all 515 cities, also claimed the No. 13 spot for midsize cities (100,000 to 300,000 residents) with the highest growth. Pearland ranked No. 27 overall and came in No. 17 among midsize cities.

Sugar Land also earned the No. 1 ranking in WalletHub's "sociodemographics" category, and, in the category for highest population growth, Sugar Land tied for No. 1 overall with Frisco and McKinney, plus three cities outside Texas.

The title of fastest-growing city in Texas goes to Frisco. The DFW suburb claimed the No. 5 spot overall and ranked No. 3 among midsize cities. Frisco also tied for No. 1 in the category of highest job growth (6.88 percent); McKinney shared that ranking.

Two other Texas cities made WalletHub's top 30: Round Rock, No. 10, and Austin, No. 15.

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This article originally ran on CultureMap.