For the 60M+ Americans that are eligible for Medicare, navigating the 24,000+ options available is a difficult and arduous process without help. The open enrollment period also places a time constraint for selecting a plan to meet an insured planned coverage needs. Chapter is a Medicare advisory platform that uses a blend of technology and a trained team of advisors to decipher all plans at a microscopic level, ensuring that members are able to enroll in the plans that are best suited for their needs based on cost and coverage. Typically, Medicare advisors are incentivized by insurance companies to enroll members and naturally, these advisors steer members towards plans that offer the best compensation; often creating a misalignment. Chapter’s advisors are all full-time employees that are not compensated directly based on commissions. Combining this dynamic with plan data that Chapter’s technology generates, members are confident that are receiving unbiased and impartial recommendations.
AlleyWatch caught up with Chapter CEO and Cofounder Cobi Blumenfeld-Gantz to learn more about how Chapter eliminates confusion for the millions signing up for coverage through Medicare annually, the company’s strategic plans, latest round of funding, which brings the total funding raised to $61M, and much, much more.
Who were your investors and how much did you raise?
This was a $42-million Series B funding round. The investment was led by Addition, which was founded by Lee Fixel, with participation from Narya Capital, Susa Ventures, Maverick Ventures, XYZ Venture Capital, Core Innovation Capital, and Health2047 Capital Partners.
This financing builds on Chapter’s Series A announced in September, when we announced that Peter Thiel would be joining the company’s Board of Directors.
Tell us about the product or service that Chapter offers.
Chapter is a Medicare Advisor with a simple commitment: it’s impossible to find a better Medicare recommendation or better support anywhere else. Chapter’s team and technology search every Medicare option nationwide at an unprecedented level of detail.
Chapter’s licensed advisors provide personalized, end-to-end guidance to Americans navigating Medicare. Chapter’s platform supports older Americans in deciding when and how to sign up for Medicare and whether they can improve existing coverage to get better benefits for less.
Our team is always inspired by hearing from the people we serve who have benefited from our concierge guidance to help them get the best-fitting healthcare coverage at the most affordable cost. Our services are free to all Americans and it is incredibly rewarding to hear about the positive impact we have had on those we help and create a long-lasting relationship with each person.
What inspired the start of Chapter?
We watched our parents attempt to navigate the maze of Medicare — nearly missing deadlines, filling out piles of paperwork, and ultimately enrolling in plans that were more expensive than comparable alternatives — and we knew there should be a better alternative. It was difficult to watch them struggle to find the right coverage. We know how overwhelming it felt not only for them but also for their friends who were also going through the same experiences when they turned 65.
We’re re-building the experience by empowering our members with the tools and support they need to have the Medicare experience they deserve. No one should have to face so much confusion as they navigate Medicare.
How is Chapter different?
Before Chapter, those navigating Medicare faced two bad options: work with a traditional broker, or try to navigate the maze alone. Traditional brokers recommend only plans that pay them commissions and are not required to do what’s best for their clients. And the resources available to individual consumers provide incomplete and often incorrect recommendations. Even Medicare.gov fails to take doctors into account and provides suboptimal guidance.
Unlike most Medicare advisors, the compensation earned by Chapter’s licensed advisors does not vary based on specific plan recommendations or selections. The advisory team earns identical compensation irrespective of the selected plan or carrier, ensuring that each Chapter member receives recommendations tailored solely for their needs.
As a result of its best-in-class data model, Chapter offers an ethical, informative, and consumer-first experience for older adults seeking to maximize their Medicare coverage. Chapter is a proud partner of the National Council of Aging (NCOA) and has met NCOA’s Medicare Standards of Excellence.
What market does Chapter target and how big is it?
More than 60 million Americans are eligible for Medicare, with 10,000 new consumers becoming eligible each day. In fact, there will be an even greater rise in the US’s aging population, which underscores the need for more solutions tailored to older Americans. By 2030, over 20% of Americans will be older than 65. Our population is quickly growing. We started Chapter because we believe this generation deserves the most comprehensive healthcare coverage available at the most affordable cost.
What’s your business model?
Like most Medicare advisors, we earn fees paid by insurance carriers, which allows us to offer our services for free.
Unlike other Medicare advisors, however, we do not limit our recommendations to plans with which we have a relationship. This means that we recommend plans every day on which we earn no revenue. This is the right thing to do because we believe the current incentivisation structure in the rest of the market does not always put people and their individual needs first.
We believe our best-in-class model of offering Americans the best coverage to fit their needs and providing a concierge service to those who are navigating Medicare for the first time or switching a plan for better coverage has earned us the growing number of stellar reviews. The people we serve have been so impressed with us and continue to refer us to their family and friends.
What are your post-COVID office plans??
We monitor guidelines from experts and will determine our re-opening plans based on their guidance. Our team continues to hire the best talent across a variety of functions including engineering, marketing, and business development. We are being careful in order to maintain the health and safety of everyone.
What was the funding process like?
Fundraising can be grueling. We spoke with many investors who decided not to invest.
What are the biggest challenges that you faced while raising capital?
Raising capital is difficult. We operate in a market that is both decidedly unsexy and poorly understood, which creates a layer of obscurity that we have to overcome. I know we have the right people in place and the technology to change the narrative. Medicare is complicated and it is important to millions of people in our country.
Raising capital is difficult. We operate in a market that is both decidedly unsexy and poorly understood, which creates a layer of obscurity that we have to overcome. I know we have the right people in place and the technology to change the narrative. Medicare is complicated and it is important to millions of people in our country.
What factors about your business led your investors to write the check?
A traditional Medicare brokerage is a great business: it serves a large and growing market, it sells a product that most people need, and if brokers do their jobs well, brokers earn strong recurring revenue.
Yet, there remains a massive opportunity to improve the user experience and operational efficiency through technology, while better serving consumers and creating a long-term relationship.
What are the milestones you plan to achieve in the next six months?
This year has seen rapid growth for the company, including opening a second office in Phoenix to expand its advising capacity. Medicare advisors at Chapter are also now licensed in all 50 states.
We plan to use this new capital to continue building the best user experience for retirees navigating Medicare, further support our members, and hire new teammates. The company is looking to fill 70 new positions in 2022. We’re growing quickly and looking for people to fill various roles in marketing, operations, finance and to join our team of licensed advisors.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Don’t limit your capital raising efforts to investors based in New York. Investors all over the country (and world) are excited to invest in companies in New York. Identifying sources of capital that are likely to invest is also really important: consider fund deployment cycles and investment themes to improve the chances of a good partnership.
Where do you see the company going now over the near term?
In the near term, we aim to be the most trusted resource for Medicare guidance and support.
What’s your favorite outdoor dining restaurant in NYC?
One of my favorite go-to restaurants is Ofrenda. Highly recommend it to anyone who has never been.
