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A digital health company became an insurance carrier under the thin veil of a product launch

By DEEKSHA HEGDE

How to spot a fundamental business model shift from a mile away, long before the PR calls it a product launch or market expansion.

In April 2026, Progyny, a fertility and family building benefits administrator, announced Progyny Select, a supplemental health plan for small and mid-size employers (100-1,000 employees). “Pooled-risk” got me curious: did they cut a deal with an insurance carrier to back the product, or had they taken on insurance risk themselves?

Until now, Progyny had only served large, self-insured employers (1,000+ employees) as a third-party administrator. They negotiated rates with fertility clinics, routed employees to better providers, managed the claims paperwork, and took a margin while employers paid the medical bills. This product launch appeared to be a downmarket expansion to capture a segment previously untapped, but the mechanics were not apparent.

I didn’t have to look very far. It was right there in the legal disclaimer at the bottom of the press release: “through subsidiaries of Progyny Inc. with state licensure to offer supplemental coverage.” Now this really got my attention. This is a digital health company turning into an insurer. You don’t see that happen every day. I decided to do some digging.

What states have they acquired licenses in, given you need one in every state you want to operate in? Their latest 10-K, surprisingly, didn’t mention anything about their flip to the insurer model. I realized they were not required to disclose the new insurance subsidiary since it hadn’t crossed revenue thresholds by the SEC’s definition. The fully insured expansion appeared as a growth target and a regulatory risk factor. They declared the move would subject them to additional laws applicable to health insurance that do not currently apply to them.

The product landing page did mention Progyny Health Insurance Company of Washington. So I pulled the thread. Washington state incorporation records showed the name had been reserved in August 2024. Six months later, in February 2025, the entity was formally incorporated. By July 2025, Progyny Health Insurance Company of Washington had been admitted as an active health insurer by the Washington Office of Insurance Commissioner. In the second half of 2025, they filed their first few products with the regulator, all still sitting in review on the SERFF database as of July 2026. The filings also make nationwide coverage ambition explicit. So this has been stewing since August 2024, the date the name was chosen. I went on LinkedIn to check if they had any actuaries on the team. They hired an actuary in April 2023, and a second in January 2026 (who specializes in pricing insurance products) three months before the launch. 

The announcement that the press called a product launch had been a strategic transformation at least three years in the making. The SEC filings hinted at it. These four signals — an actuary hire, a name reservation, an insurance license, and active product filings with a state regulator — were sitting in plain sight the whole time. For anyone watching, just one of those foreshadowed what was coming.

I’ve been watching the market reaction since the launch. The move is still being read as market expansion downward, when it’s really business model innovation.

Why become an insurer at all?

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Let’s Check the Math on Health Subsidies

By KIM BELLARD

It’s December 3, and, to no one’s surprise, Congress still has not acted on extending the expanded health care premium tax credits for ACA. To Congress, the subsidies don’t expire until the end of the year, so they figure they have until at least then to act, or maybe sometime after that, given the way they handled the recent government shutdown.

On the other hand, consumers who are renewing or shopping for ACA plans face a more immediate deadline; they have until December 15 to enroll for January 1st. They’re already seeing huge increases that result from a normal renewal increase plus the loss of the generous subsidies; Kaiser Family Foundation estimates that their premiums will more than double without them. They can’t wait while Congress plays politics.

There seems to be agreement that something will be done about the subsidies, but less clarity about what that something is. Some centrists argue to extend the enhanced subsidies but with some tweaks, such as lowering the upper income levels and/or requiring everyone to pay at least some minimum premium. To me, that’d be a reasonable compromise. But some Republicans, including President Trump, are calling for a more radical change: instead of giving the expanded premium tax subsidies to those “fat cat” insurers, give them directly to consumers through health savings accounts (HSAs). Put individuals over insurers, they argue. 

I’m here to tell you: the math does not work.

I am not an actuary, but long ago I was a group underwriter, setting rates for employer groups’ health insurance, and, also long ago, I was involved in the early days of so-called consumer directed health plans (CDHPs), including HSAs and high-deductible health plans. I don’t disagree that HSAs and high-deductible plans can play a role, but one has to understand the math that drives health care spending.

The central fact of health care spending is that it isn’t evenly distributed. It is a perfect example of the Pareto principle: 80% of spending comes from 20% of people. The flip of that is that about 15% of people have no healthcare spending in any given year. What insurance does is take money from everyone and use it to fund the spending of the high cost people. That’s what all insurance does.

OK, I’ve avoided doing the math as long as I could, but here goes. One proposal has called for $2,000 to be deposited in each enrollee’s new HSA. Let’s keep it simple and say there are 1,000 such people, and that their average annual health care spending is $2,000 (which, of course, is way low). So we have 1,000 x $2,000 = $2 million in both subsidies and spending. It works out perfectly, right?

Not so fast.

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American Medicine’s Meagerness Paradox

By MARC-DAVID MUNK

In our palliative medicine clinic in the working suburbs of Boston, my colleagues and I tend to some of the sickest patients in the city. Through the window, I can see the afflicted pull up to our squat building in family sedans, wheelchair vans, and subsidized municipal ride cars. Few drive themselves: most bear terrible illnesses that make them too frail or sedated. I watch as patients who are barely able to dress themselves, somehow arrive in their Sunday best for clinic.

Our job, as their doctors, is to manage their pain and provide moral support and practical help with things such as rent and transportation, sometimes spiritual support too. It’s important work, among the highest callings in medicine. Yet, as noble as this work might be, our clinic doesn’t begin to support itself financially. If there was ever a reason to spend graciously on patients and their needs, these visits, with their sick and vulnerable patients, would be exemplars. In fact, we don’t receive enough payment from insurers to cover the costs of the complicated work that’s needed. Practically, this translates to few staff to help with appointments, not enough follow-up calls, nobody to help with insurance headaches or pharmacy shortages, nobody answering the phone. Our facilities are tired. The simplest niceties—coffee in the waiting room, magazines, a comfortable chair—are long gone.

There is a feeling of “meagerness” in the air. It’s the feeling of being rationed. It’s an absence of all but the truly essential; no plenitude, a lack of graciousness. I see meagerness when my friend, an emergency physician at a major trauma center, shares pictures of his decomposing ER: desk chairs held together with medical tape, rooms without functioning equipment. Medical supplies that are so scarce that doctors keep stashes in their desks and coat pockets.

The administrators will say that these barren conditions are a consequence of financial scarcity. There isn’t enough money to pay for more than skeleton support and upkeep. Hospitals are running deficits and downsizing. Keeping the lights on is apparently a question of saving pennies at every opportunity. And, with every cut, meagerness grows. This all sounds, on its surface, understandable till you take a step back and realize it isn’t. We know that American healthcare consumes more money than any other country, per capita. Money is pouring, truly flooding, into our healthcare system. Family health insurance premiums rose 7% from 2023, after another 7% increase the year before. The average family policy now costs around $25,000 per year.

Which leaves me wanting to reconcile how there can be so much money entering the system, with so little left for essential front-line care. I know that this isn’t a complicated answer.

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How Did We End Up with a Broken Health Insurance System? 

By LEONARD D’ AVOLIO

The murder of UnitedHealthcare CEO Brian Thompson has drawn attention to Americans’ frustration with the for profit healthcare insurance industry. Change is possible but less likely if people don’t understand how we got here, the real issues, and how they might be fixed. 

Health insurance wasn’t always run by big for profit corporations 

According to Elizabeth Rosenthal’s book, An American Sickness (a must read), it all started in the 1920s when the Vice President of Baylor University Medical Center discovered that they were carrying a large number of unpaid bills. The goal wasn’t to make money. It was to keep sick people from going bankrupt while helping keep the lights on at not-for-profit hospitals. 

Baylor launched “Blue Cross” as a not-for-profit and it offered one-size-fits-all coverage, one-size-fits-all pricing, and all were welcome. By 1939, Blue Cross grew to 3 million subscribers and health insurance might have stayed this way if it wasn’t for two important innovations that would change healthcare and insurance as we know it.

Before the late 1930s, there wasn’t a heck of a lot we could do for sick people. That all changed with two innovations: 1) the ventilator and 2) the first intravenous anesthetic. The ability to put people to sleep and keep them breathing opened the door to a whole array of new surgical and intensive care interventions. More interventions meant more lives saved. It also meant longer hospital stays, more expensive equipment and care. Insurance would have to evolve to keep up with medical innovation.

We probably could have solved that problem with direct-to-consumer private insurance (like car or life insurance). But World War 2 introduced a creative workaround to a labor shortage that gave employers an outsized role in determining our health. 

Health insurance tied to employment

During World War 2, the National War Labor Board froze salaries and companies faced labor shortages. Employers figured out they could attract employees by offering health insurance. The government encourages this by giving a tax break to employers on health insurance spending.  

The number of Americans with health insurance skyrockets. Between 1940 and 1955, this number increased from 10% to over 60%, with the not-for-profit Blue Cross dominating. It’s hard to believe nowadays, but at the time, an insurance company was one of the most beloved brands in America.

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Take a Tip from Domino’s

By KIM BELLARD

If you’re already thinking ahead to next Sunday’s Super Bowl, you might be thinking about Domino’s, because, as everyone knows, pizza and football go together like mom and apple pie.  I’m thinking about Domino’s too, but not because I’m planning my order.  It’s about their new program to reward customers who do more of their own work.  

Ahem, healthcare: pay attention.

Last week Domino’s announced that customers who picked up their own orders, rather than using delivery, would earn a $3 tip.  Art D’Elia, Domino’s executive president and chief marketing officer, explained: 

It takes skill to get pizza from a Domino’s store to your door. As a reward, Domino’s is giving a $3 tip to online carryout customers who take the time and energy out of their day to act as their own delivery drivers. After all, we think they deserve it. 

The program – Domino’s Carryout Tips – isn’t quite as rewarding as it might sound.  The $3 is actually a credit on your next order, and that credit has to be used by the following week.  There’s a $5 minimum to qualify, and orders have to be online.  The program was announced in time for the expected Super Bowl surge and is scheduled to end May 22.  

But still.  I don’t like waiting for deliveries, I do like pizza, and if I ordered a lot of Domino’s (which I don’t), the $3 tip would be decent discount, even if I had to order even more Domino’s to actually get it.

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Matthew’s health care tidbits: #What is insurance again?

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Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

For my health care tidbits this week, I was reminded on Twitter that many Americans really don’t understand health insurance. A spine surgeon no less in this thread (no jokes about arrogance please) was telling me that he was paying ~$8,000 a year ($4,000 in insurance and $4,000 in deductible) before he got to “use” his insurance–which, as his medical costs were low, he never did. Others were complaining that the cost of employee premiums were over $20K. They all said they should keep the money and (presumably) pay cash when they do use the system. It’s true that most people don’t use their insurance. That’s the whole point. When you buy house insurance, you don’t expect your house to burn down. You are paying into a pool for the people whose house does burn down.

In the US we are on average spending $12k per person on health care each year. But spending on most people is way under that and for a few it’s way, way over. If you take the rough rule that 50% of the spending is on 10% of the people then 35 million people account for $2 trillion in spending–that’s ballpark $60,000 each. They are the ones with cancer, heart disease, complex trauma, etc, etc. The rest of us are “paying” our $4,000, $8,000 whatever, into the pool to cover that $60,000.

There are only two ways to lower that cost for the healthy who aren’t “using” their insurance. One is to exclude unhealthy people from that insurance pool, which makes the costs for everyone else much less. We did that for years with medical underwriting and it was nuts because it screws over the unhealthy. Fixing the pre-existing condition exclusions was the only bit of Obamacare everyone agrees on–even Trump. But now we are ten plus years into this new reality, some people have forgotten how bad it was before.

The other way is to reduce the costs in the system and lower that $4 trillion overall. How to do that is a much longer question. But it isn’t much connected to the concept of insurance.

And You Thought Health Insurance Was Bad

By KIM BELLARD

I spend most of my time thinking about health care, but a recent The New York Times article – How the American Unemployment System Failed – by Eduardo Porter, caught my attention.  I mean, when the U.S. healthcare system looks fair by comparison, you know things are bad.

Long story short: unemployment doesn’t help as many people as it should, for as much as it should, or for as long as it should. 

It does kind of remind you of healthcare, doesn’t it?

The pandemic, and the associated recession, has unemployment in the news more than since the “Great Recession” of 2008 and perhaps since the Great Depression.  Last spring the unemployment rate skyrocketed well past Great Recession levels, before slowly starting to subside.  Still, last week almost a million people filed for unemployment benefits, reminding us that unemployment is still an issue.

Keep in mind that unemployment rates do not tell the full story, as they don’t count those only “marginally attached” to the workforce – people who would like to work but have given up – and counts part-time workers who would like to work full time as “employed.”  The “true” unemployment rate is reckoned to be much worse than the official rate.

Congress has enacted several COVID relief measures, including in late December, to extend duration, amount, and applicability of unemployment benefits, but our unemployment systems remain predominantly state designed and administered.  The shortcomings of these systems have been severely exposed over the past few months: neither the processes nor the actual technologies supporting them proved robust enough for the volume of applicants.  Last December Pew Trusts reported that “unemployment payments were weeks late in nearly every state.” 

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Will Your Health Plan Tell You That It Can Save Your Life?

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By MICHAEL MILLENSON

At kitchen tables everywhere, ordinary Americans have been grappling with the arcane language of deductibles and co-pays as they’ve struggled to select a health insurance plan during “open enrollment” season.

Unfortunately, critical information that could literally spell the difference between life and death is conspicuously absent from the glossy brochures and eye-catching websites.

Which plan will arrange a consultation with top-tier oncologists if I’m diagnosed with a complex cancer? Which might alert my doctor that I urgently need heart bypass surgery? And which plan will tell me important information such as doctor-specific breast cancer screening rates?

According to Matt Eyles, president and chief executive officer of America’s Health Insurance Plans (AHIP), insurers over the last decade have made a “dramatic shift” to focus more on consumers.  That shift, however, has yet to include giving members the kind of detailed information available to corporate human resources managers and benefits consultants (one of my past jobs).

What’s at stake could be seen at a recent AHIP-sponsored meeting in Chicago on consumerism. Rajeev Ronaki, chief digital officer for Anthem, Inc., explained how the giant insurer is using artificial intelligence to predict a long list of medical conditions, including the need for heart bypass surgery. Information on individual patients is passed on to clinicians.

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Scaling Health Insurance Disruption | Ali Diab, Collective Health

By JESSICA DAMASSA, WTF HEALTH

Ali Diab, CEO & Co-Founder of Collective Health, wants to talk about healthcare affordability and the fact that consumerism doesn’t really exist when it comes to healthcare because we don’t really have a functioning market. The “Real” buyers — from the federal government to large employers — have no idea what things cost in traditional health plans and are making healthcare purchases for their constituents without full price transparency. So, what has he and Collective Health learned now that they’re 6 years into trying to offer these buyers an alternative to that traditional health plan experience? Nothing is more complex than health insurance innovation, but Collective Health is making significant headway and, according to Ali, has made it past the “homicide phase” of being a digital health startup.

Filmed at HLTH 2019 in Las Vegas, October 2019.

Jessica DaMassa is the host of the WTF Health show & stars in Health in 2 Point 00 with Matthew Holt.

Get a glimpse of the future of healthcare by meeting the people who are going to change it. Find more WTF Health interviews here or check out www.wtf.health. 

I Finally Understand US Health Policy

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By UWE REINHARDT

The following exchange occurred during an interview of President Trump with journalists of the NYT:

HABERMAN: That’s been the thing for four years. When you win an entitlement, you can’t take it back.

TRUMP: But what it does, Maggie, it means it gets tougher and tougher. As they get something, it gets tougher. Because politically, you can’t give it away. So pre-existing conditions are a tough deal. Because you are basically saying from the moment the insurance, you’re 21 years old, you start working and you’re paying $12 a year for insurance, and by the time you’re 70, you get a nice plan. Here’s something where you walk up and say, “I want my insurance.” It’s a very tough deal, but it is something that we’re doing a good job of.

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