Soda Health, which helps health plans administer their supplemental benefits, received $50 million in a Series B funding round, the company said Tuesday.
The round was led by venture capital firm General Catalyst. Former Humana CEO Bruce Broussard also invested along with venture capital firms Lightspeed Venture Partners, Define Ventures, Qiming Venture Partners USA and SVB Capital.
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Soda’s payment platform connects health plans’ Medicare Advantage and Medicaid members with retailers and other suppliers of supplemental benefits, which can include over-the-counter medications, groceries and transportation services. Members can view their supplemental benefits and where to find them at participating retailers through the platform, which is branded by Soda’s health plan customers. Health plans get access to analytics and insights into members’ usage and their needs for supplemental benefits.
The company’s business model with supplemental benefits is similar to pharmacy benefit managers with prescription medications, said Soda Health co-founder and CEO Robby Knight.
“We go to health plans … and 80% to 90% of their members have an over-the-counter medication or food benefit that we offer,” Knight said. “We get distribution [with them], they pay us for our services and then we make this generally available to the vast majority of their members in whatever configuration they need.”
By 2025, the company will have 12 health plan partners and relationships with several large retailers including Kroger’s, Albertsons and CVS, Knight said.
The platform helps members, health plans and retailers understand which over-the-counter medications and nutrition benefits are available to Medicare Advantage and Medicaid members. Knight said historically these three parties haven’t been on the same page regarding what products are eligible, which can lead to anger and dissatisfaction.
Prior to launching Soda Health, Knight along with co-founder Daryl Risinger worked as executives at Walmart, where they got a firsthand look at the way seniors on Medicare Advantage paid for over-the-counter medications through their supplemental benefits package. The technology behind this program was meant to help people pay for gift cards, not supplemental benefits, he said.
“We got tired of apologizing to health plans for the technology and for the things that didn’t work,” Knight said. “What we've heard repeatedly from a lot of health plans is that this area represents one of the highest grievance rates among all their services."
With Medicare Advantage under the microscope and insurers cutting plans, Knight said Soda Health can offer health plans a chance to optimize return on investment. The company also works with an unspecified number Medicaid plans.
Soda plans to use the $50 million in funding to expand capabilities to new Centers for Medicare and Medicaid Services-compliant benefit categories and develop its analytics capabilities, Knight said.
Caitlin Donovan, partner at General Catalyst and former head of Uber Health, has joined the company’s board of directors as part of the funding round.
