I'd be interested in hearing more about it. Health insurance may not be sexy, but solutions to extremely complex business problems are, and I imagine there's some element of that in a health insurance startup.

That domain seems to be one of the most intractable around these days. It seems the gist of the situation is: There are four parties - doctors/staff/hospitals, patients, health insurance industry, and government/taxpayers. Effective reform is going to mean at least one of them gets [screwed|insert nicer word here]. There just isn't enough margin for all of them to make out comfortably.

Or is there some elegant solution hiding in the morass, waiting for some clever entrepreneurs to find and implement it?

There are actually 5 parties, you missed the Employer and that's the part of health insurance that we're trying to solve.

Currently in America, if you're not on medicare/medicaid, the vast majority of people get their health insurance through their employer (this is called a Defined Benefit). Providing this benefit to employees is a huge burden on employers for something that has nothing to do with their core business model.

What my company is doing is moving this to a Defined Contribution, where an employer gives $X/year to each employee and the employees can use that money to purchase whatever kind of health insurance fits their situation best.

Employer benefits:

- known, controllable costs

- get out of health insurance negotiation/shopping for their employees

- better awareness of employees in how much employer is contributing

Employee benefits:

- more plan choice to fit needs (ex: mental health, substance abuse, pregnancy coverage as options)

- many times cheaper for healthy individuals (encourages more responsibility for employees staying healthy)

- more transparency into total compensation by employers

The same transformation happened in the 80's with pensions moving to 401k. The move from Defined Benefit to Defined Contribution is coming, and there's a huge market out there to make that transition happen.

Pension : 401k :: Defined Health Benefit : Defined Health Contribution

There's also a HUGE opportunity coming up with Health Reform where companies that didn't previously provide health insurance to their employees will now be mandated to (or pay a big penalty). Going with a Defined Contribution model is their easiest route to satisfying the mandate. Simply fork over a pile of money and you're done. No other screwing around with health insurance companies/brokers every year to do something new.