Investors poured $1.2 billion into health insurance startups in 2015 alone, according to CB Insights, despite that most policy experts view it as a highly speculative bet. In the course of my reporting for a larger feature, I asked Sequoia Capital’s health investor, Mike Dixon, to weigh in on the trend:
I agree that it’s speculative, but the market is juicy and the current players aren’t well liked. When Silicon Valley sees employers and consumers not happy with the status quo, we get excited. But on the flip side, I recognize that what Aetna, Anthem and the rest do isn’t easy. It takes a lot of capital requirements. I’m personally more bullish on the Medicare Advantage market than the individual market, where it’s very hard for any company to make money.
Dixon is an investor in Clover Health, an upstart Medicare Advantage plan based in New Jersey.