Insurtechs with low-cost options could draw in more younger consumers

The pandemic has caused changes to healthcare coverage for Gen Zers and millennials more than

  • The pandemic has caused changes to healthcare coverage for Gen Zers and millennials more than it has for older adults.
  • This will bring tech-driven insurance startups to more narrowly focus on appealing to younger consumers. 
  • Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Digital Health industry with the Digital Health Briefing. For a limited time, you can try the Briefing for a full week for just $1!

The coronavirus pandemic has sparked more changes to health coverage for millennials and Gen Zers compared with older cohorts. As a result, younger consumers are heading online to look for cost-effective care, according to a new TransUnion Healthcare survey.

Pandemic has impacted younger adults' health insurance coverage more than older adults'

The pandemic has impacted younger adults’ health insurance coverage more than older adults’.

Business Insider Intelligence


  • One-third of Gen Z and 29% of millennial respondents said the pandemic has disrupted their coverage—outpacing Gen Xers (18%) and baby boomers (12%). A spike in unemployment catalyzed by the pandemic contributed to an estimated 12 million US citizens losing health insurance as of late August, according to CNBC—and considering the job loss surge has disproportionately impacted younger workers, it makes sense that they’d be more affected by insurance loss, too. 
  • The younger cohorts (Gen Zers: 90%; millennials: 87%) are more likely to go online to research cost options than older counterparts (Gen Xers: 79%; baby boomers: 69%). Younger consumers have historically been more likely to compare prices online before making a purchase—and they’re extending this behavior to the way they shop for healthcare. Losing insurance means patients are on the hook for heftier healthcare costs, giving them a greater incentive to seek out cheaper care options. And once they seek care, cost is the determinative factor when choosing a provider for the majority of Gen Zers (59%) and millennials (55%), but the minority of Gen Xers (49%) and baby boomers (36%).

Many health insurance startups offer tech-focused plans targeting younger consumers—and they are in a prime spot to attract more members. Health insurtechs featuring tools that allow members to shop around for low-cost care could reel in younger members looking for cheaper options.

For example, startup Oscar Health—which touts a high-deductible plan with low monthly premiums for patients under 30—provides members with a “Concierge” care team they can connect with via an app. The team can link them with providers that will give them the care they need without superfluous offerings and costs and guide them through billing processes to help avoid unnecessary spending.

Because health insurtechs including Oscar and Bright Health have been on the receiving end of massive VC funding rounds in recent months, we think they’ll continue to use this cash to broaden their footprints in the individual plan marketplace with options and tech that meet the rising demand from convenience-driven, cost-conscious millennials and Gen Zers.

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