- We got our hands on the pitch deck that health insurance startup Troy Medicare is using to raise an additional $25 million.
- Troy Medicare offers Medicare Advantage plans to seniors in North Carolina with an unusual twist: the plan pays community pharmacists to keep their members healthier.
- Here's a look at the startup's approach to the red-hot Medicare Advantage market, which has attracted hundreds of millions in venture funding.
- Click here for more BI Prime stories.
Troy Medicare offers Medicare Advantage plans to seniors in North Carolina with an unusual twist: the plan pays community pharmacists to keep their members healthier. It's in its first year of offering health plans.
The company is currently raising a $25 million Series B funding round, and we obtained a copy of the deck the company's team is using to pitch investors.
It's a much smaller amount compared to other Medicare Advantage startups that have taken in hundreds of millions early on to fuel their growth and compete with the industry's leaders.
"Troy Medicare's progress has surpassed all expectations," Troy CEO Flaviu Simihaian told Business Insider in response to a request for comment. "By empowering local providers and pharmacies with streamlined operations and fair pricing, each member receives the best, tailored, hyper-local care. Now, we are focused on scaling the Troy model to more states."
Competition for the 22 million Americans enrolled in Medicare Advantage plans, and the thousands signing up daily as they turn 65, is fierce. Medicare Advantage is a privately run alternative to the traditional Medicare program, which provides medical coverage for seniors and some others in the US.
Here's a look at Troy's pharmacy-driven approach to taking on the massive market.
The deck starts out with a bright red slide with Troy's logo.
The presentation immediately launches into what Troy's focusing on, namely removing "the fat" in Medicare Advantage, though it doesn't immediately specify what that is.
Then the deck lays out the scope of the market for Troy. As of 2019, 22 million people were enrolled in Medicare Advantage plans, the private plan side of the federally-funded Medicare program for seniors 65 and up. The slide deck cites estimates that the market will grow to 40 million members and $800 billion in size by 2025.
Source: Kaiser Family Foundation, LEK Consulting
Next, the deck gives context around independent pharmacies, emphasizing just how big a piece of the overall pharmacy business they are compared to big chains like Walgreens and CVS Health as well as explaining how many times patients are at the pharmacy.
Read more: Amazon is threatening the future of independent pharmacies. Here's how they're fighting back.
Troy is also clear it's up against stiff competition. In North Carolina, Troy is competing against some of the biggest insurers in the US, like UnitedHealthcare, Humana, and Cigna.
Finally, the deck gets into "the fat." By the company's calculations, that includes everything from marketing the plans, to brokers who help seniors find plans, to companies that help manage the pharmacy benefit or care management.
That, the deck argues, is where Troy comes in, in particular by leveraging the pharmacists that operate independent pharmacies around the US.
The company then provides a quick timeline of what it's already accomplished. 2020 is the first year the company has offered health plans. It enrolled roughly 250 members going into 2020 and says it spent $0 on customer acquisition costs.
Importantly, Troy breaks down its financial projections, noting the amount of capital it has raised and is looking to raise. By 2026, its seventh year offering plans, it expects to have nearly 25,000 members and report a net gain of $33.4 million.
The deck then breaks down how Troy is able to acquire customers at a lower cost than rivals, by relying on pharmacists to promote the plan to their patients. Troy also pays the pharmacists $30 a month to manage the care of patients.
Read more: A health insurance startup in North Carolina is betting on pharmacists in an entirely new approach to a $327 billion market
The pharmacists aren't just responsible for getting the word out about the health plan, they're also on the hook to help manage the health of the members. The pharmacy meets with each member once a month not only to discuss medications but also to talk about their broader health goals.
The plan also has perks, such as $0 primary care visits, coverage of certain durable medical equipment, as well as a transparent list of the prices of medications that are covered.
Going into its second year offering plans, Troy has the goal of expanding to more counties within North Carolina, while also looking to meet with the insurance departments in nearby South Carolina, Virginia, and Tennessee. The startup also plans to add a new plan that serves a population eligible for both Medicare and Medicaid.
At the end, the deck spends three slides laying out the members of Troy's leadership team, noting their backgrounds in the industry.
The team includes pharmacists, including clinical director Amina Abubakar, who owns Rx Clinic Pharmacy in Charlotte, North Carolina and serves as Troy's clinical director.
Also on the team: Jeff Spight, who serves as chairman of the board. Prior to joining Troy, he was the president of Universal American's ACO business.
The presentation ends with the basics around what Troy's looking to raise. The deck notes that much of what's been raised so far comes from pharmacists and doctors.
ncG1vNJzZmivp6x7o8HSoqWeq6Oeu7S1w56pZ5ufony1vs6yZKadlJ6wor7EZqCnrpWowbC%2BjKmgrZuYYrGmr8pmp6unmpqwtbXOp6pmnp%2Bneq6xw6KamqqVYq6lwsCnq5qflWJ%2FcX6PZmk%3D