Nara Health, an AI-powered third party administration platform, announced on Monday that it secured $14 million in pre-seed and seed funding.
The Chicago-based startup uses AI to build custom health plans for employers. The platform serves as “air traffic control for health plans” by bringing together benefits administration, claims processing, care orchestration and member support in one place, according to Sid Sinha, co-founder and CEO of the company. It offers alternative plan designs, 24/7 guidance with AI and humans, and same-day claims adjudication and cash pay. It has more than 25,000 members and has processed more than $600 million in claims.
Nara Health’s funding was led by Khosla Ventures, with participation from Long Journey Ventures and Superior Studios.
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“Employer health plans have absorbed decades of cost increases with no real mechanism to push back on the underlying pricing,” said Samir Kaul, founding partner and managing director at Khosla Ventures, in a statement. “Sid and his team have the clinical chops to know exactly where those dollars are getting wasted, and the technical depth to actually rebuild the systems that decide how they’re spent. That combination is rare – most teams have one or the other. Nara Health has both.”
The financing will be used to grow Nara Health’s team in Chicago and scale its platform, Sinha told MedCity News.
Currently, 170 million Americans get healthcare through their employer, but many are struggling to effectively use their benefits.
“Despite employers spending tens of thousands of dollars per employee annually on health benefits, the American healthcare experience remains slow, confusing, and reactive, held together by manual processes and fragmented software,” Sinha said. “Alternative health plan designs, like direct provider contracts, cash pay, reference-based pricing, and direct primary care, can massively reduce what employers spend on healthcare while giving employees clearer pricing and easier access; however, historically, the infrastructure hasn’t existed for this.”
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Nara Health has helped its employer customers reduce costs by more than 50% compared to the employer’s health plan the previous year, according to the announcement. It also provides same-day prior authorization decisions, versus the industry standard of three to five days, the company declared.
The company ultimately aims to make health insurance more affordable and easier to navigate, according to Sinha.
“The concept of individualized insurance isn’t novel, but the data and technology haven’t existed at scale until now. The future we’re building combines the best elements of group health plans with a changing world where consumerism is increasing and dollars and power are shifting to individuals,” Sinha said.
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