Medicare advisory company Chapter and its team, backed by investor and Palantir Technologies founder Peter Thiel, wants to make the Medicare enrollment process easy, cheaper and free from government red tape.
As of Tuesday, it raised $17 million in fresh funding, bringing its total funding to date to approximately $19 million. The new capital will be used to build out its team of licensed advisors and engineers in order to provide a better product for its customers.
"It is a commonplace that dealing with the government is difficult. It is uncommon that anyone does anything about it," Chapter board member Thiel in a statement. "Chapter’s ability to help people navigate Medicare’s bureaucratic maze makes it both admirable and valuable."
Prior to Palantir, Thiel helped found Paypal and was an early backer in Facebook.
Chapter founder Cobi Gantz told FOX Business that the company's mission is to help Medicare beneficiaries find and enroll in the best possible insurance coverage at the best possible price.
"There are a host of challenges that people face as they're navigating Medicare either for the first time or as they're trying to make sure that they get the best coverage going forward at the best price," Gantz explained. "We try to take all of the complexity and difficulty out of that and give people the peace of mind that they're getting the best price for the right coverage for them."
Gantz noted that, even in markets with a "large heterogeneity" of Medicare plans, the difference in prices that customers can pay for identical coverage can range north of $1,500 to $2,000 per year.
In addition to helping individuals ages 65 and older enroll in Medicare, Medicare Advantage and Medicare supplement plans, Gantz says Chapter will walk customers through the Social Security website and outline any important information and contact numbers they need to know.
"When we're allowed to, we will make the call for you," he added. "We're unfortunately not always allowed to, it has to be the person responsible there, but we automate as much of it as we can."
Chapter, like most Medicare advisory companies, makes its money by charging insurance carriers a commission fee. However, Gantz says the company stands out from the competition by providing its customers with an abundance of free Medicare plan recommendations, including those outside of its normal contracts, as well as more granular data.
"We hire and employ all of our Medicare advisors full-time in-house and we don't incentivize them differently based on the plan that they recommend," he said. "So they aren't just getting a percentage of revenue that they generate, which is also really important so that we don't have our advisors just recommending a subset of plans that pay them more."
Chapter has saved its members an average of roughly $750 per year per person, though the savings fluctuate based on each member's situation, Gantz said.
Chapter's Series A funding round was led by Narya Capital with participation from Susa Ventures, Maverick Ventures, XYZ Venture Capital, Core Innovation Capital, and Health2047 Capital Partners.
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In addition to Thiel's appointment to Chapter's board of directors, the company has launched a partnership with Palantir to accelerate the development of its Medicare data platform. Chapter has also earned a Standards of Excellence for Medicare designation from the National Council on Aging.
By 2030, the entire Baby Boomer generation will reach retirement age, according to the Census Bureau.