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Friday Health aims for splash in N.C. health insurance

There’s an entrepreneurial newcomer in the world of North Carolina health insurance for individuals and small groups.

In October, the N.C. Department of Insurance approved Friday Health Plans to offer health coverage to residents in 40 counties starting in January. The company based near Denver was formed in 2015 and has raised $210 million as it has expanded to seven states, including North Carolina, Georgia and Oklahoma this year. Membership growth has increased more than fourfold this year to more than 70,000 members with Affordable Care Act-compliant plans sold through the company’s website and insurance brokers.

State Insurance Commissioner Mike Causey believes Friday provides North Carolinians a new option and that the company has sufficient providers to meet demand of its projected membership, spokesperson Barry Smith says.

Friday may attract customers because it offers low-cost health plans promising zero-premium benefits for many customers including unlimited primary care visits; mental health counseling sessions; annual vision checkups; thousands of free preferred generic drugs; and free virtual care visits with doctors and mental health counselors. The use of telehealth services exploded during the COVID-19 pandemic and is becoming a more accepted practice.

Friday aims to be the low-cost provider in its markets, though it is a fraction of the size of dominant insurers such as Blue Cross Blue Shield, United Healthcare and others.

Among the large N.C. counties in which Friday is offering coverage are Buncombe, Catawba, Guilford, Henderson, Pitt and Watauga.

We asked CEO Sal Gentile some questions about the company via email.

How does a zero-premium plan work?

A $0 premium depends on how much financial aid you get from the Affordable Care Act program. Financial aid, or a “subsidy,” is determined by your household size and annual income. Let’s say you qualify for $400 a month in financial aid, you could apply that to a health plan that costs $400 or less, and you would pay $0. People should evaluate all available health plans and determine which one will work best for them in terms of benefits.

How many doctors and hospitals are in network for Friday Health?

Friday Health contracts with major networks like HCA Health (Mission Health), Appalachian Regional Healthcare System, Duke Life Point, Frye Regional Medical Center, Cone Health, Vidant Health and thousands of specialists, primary care doctors, and urgent care clinics around the state.

Why pick North Carolina to offer insurance?

Friday Health Plans is extremely thoughtful when determining when and where to expand, because we only want to go where we can add value to communities. There are many factors that go into these decisions such as the number of quality hospitals and health professionals that will partner with us, of which we have certain standards for network adequacy and maintaining the lowest-priced plans. Additionally, Friday does extensive demographic research on potential growth areas to ensure its services will benefit and be sought out by our target customers, who are individuals, families and small businesses who buy their own health plans.

How do potential customers know if their existing providers will be covered under Friday health’s plans?

Potential and existing Friday members can search Friday’s comprehensive provider directory on its website. Members can search doctors by name and specialty, as well as facilities by name and type and nearby in-network pharmacies. Friday’s North Carolina network can be accessed here: https://www.fridayhealthplans.com/member-hub/resources/find-a-doctor/nc/

Why did Friday Health select these 40 N.C. counties?

Friday goes through thorough analysis of each county’s demographics, health insurance carriers and health ecosystem. Each area has to be a mutually beneficial match between us and the community for us to move forward, and the factors determining that can vary by each county. For example, one county may be predominantly Medicare members who will maintain their current plans, whereas health facilities in another county may not have been able to work with us on pricing to deliver low-cost plans. That said, Friday works to continuously form partnerships to grow its footprint in existing states year-over-year.

Share some context on the company’s financial strength.

Friday is required by certain states to hold specified amounts of capital, so by law, the company is well capitalized. In June 2021, AM Best upgraded Friday’s Financial Stability Rating and the outlook for the Long-Term Issuer Credit Rating is positive. The upgrade and the positive outlook reflect Best’s expectation of continued improvement in Friday’s balance sheet strength assessment. It’s important to note that the A.M. Best rating is based on 2020 data, so it does not account for the company’s recent gains from 2021.

In April, Friday Health completed a second round of capital raising, securing approximately $160 million in funding led by Vestar Capital Partners, including debt financing from Leadenhall Capital Partners. This funding follows $50 million in institutional funding Friday received from Peloton Equity, Leadenhall Capital Partners and the Colorado Impact Fund in 2019. In June 2020, Friday also entered into a multi-year 50% quota share reinsurance agreement with AXA to accelerate its growth in current and new markets.

 

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