By DEEKSHA HEGDE
Easy methods to spot a basic enterprise mannequin shift from a mile away, lengthy earlier than the PR calls it a product launch or market growth.
In April 2026, Progyny, a fertility and household constructing advantages administrator, introduced Progyny Select, a supplemental well being plan for small and mid-size employers (100-1,000 staff). “Pooled-risk” obtained me curious: did they lower a take care of an insurance coverage service to again the product, or had they taken on insurance coverage danger themselves?
Till now, Progyny had solely served massive, self-insured employers (1,000+ staff) as a third-party administrator. They negotiated charges with fertility clinics, routed staff to raised suppliers, managed the claims paperwork, and took a margin whereas employers paid the medical payments. This product launch seemed to be a downmarket growth to seize a section beforehand untapped, however the mechanics weren’t obvious.
I didn’t must look very far. It was proper there within the authorized disclaimer on the backside of the press launch: “by means of subsidiaries of Progyny Inc. with state licensure to supply supplemental protection.” Now this actually obtained my consideration. This can be a digital well being firm turning into an insurer. You don’t see that occur day by day. I made a decision to do some digging.
What states have they acquired licenses in, given you want one in each state you need to function in? Their newest 10-K, surprisingly, didn’t point out something about their flip to the insurer mannequin. I noticed they weren’t required to reveal the brand new insurance coverage subsidiary because it hadn’t crossed income thresholds by the SEC’s definition. The totally insured growth appeared as a development goal and a regulatory danger issue. They declared the transfer would topic them to further legal guidelines relevant to medical insurance that don’t presently apply to them.
The product touchdown web page did point out Progyny Well being Insurance coverage Firm of Washington. So I pulled the thread. Washington state incorporation records confirmed the identify had been reserved in August 2024. Six months later, in February 2025, the entity was formally integrated. By July 2025, Progyny Well being Insurance coverage Firm of Washington had been admitted as an energetic well being insurer by the Washington Office of Insurance Commissioner. Within the second half of 2025, they filed their first few merchandise with the regulator, all nonetheless sitting in assessment on the SERFF database as of July 2026. The filings additionally make nationwide protection ambition express. So this has been stewing since August 2024, the date the identify was chosen. I went on LinkedIn to verify if they’d any actuaries on the group. They employed an actuary in April 2023, and a second in January 2026 (who focuses on pricing insurance coverage merchandise) three months earlier than the launch.
The announcement that the press referred to as a product launch had been a strategic transformation at the very least three years within the making. The SEC filings hinted at it. These 4 indicators — an actuary rent, a reputation reservation, an insurance coverage license, and energetic product filings with a state regulator — had been sitting in plain sight the entire time. For anybody watching, simply a kind of foreshadowed what was coming.
I’ve been watching the market response for the reason that launch. The transfer continues to be being learn as market growth downward, when it’s actually enterprise mannequin innovation.
Why turn out to be an insurer in any respect?
For small totally insured employers, the well being plan itself bears the claims danger, and no service needs to soak up a $15,000 IVF cycle in a pool of 100 folks, so incumbents go away fertility out of the bottom plan. Self-insured employers are a finite market Progyny has been working for a decade. To achieve the totally insured employer market, somebody needed to maintain the chance. In my earlier items on Function and Hinge, I argued that the businesses that scale to win insurers over are those producing sufficient outcomes knowledge to earn actuarial credibility. Progyny took that one step additional. As an alternative of utilizing their knowledge to persuade an insurer, they grew to become one. And it makes whole sense. They maintain 10 years of proprietary fertility claims knowledge. They know what claims value, throughout which demographics, with what variance. Turning into the risk-bearing entity who can value it precisely opens them as much as underwriter margins whereas they’ve been working with TPA margins all this whereas.
Holding proprietary knowledge that will get higher with time is just one a part of why they might afford to enterprise into underwriting. Right here’s the whole lot else that was true concurrently:
- Protection is for a discrete, priceable occasion. One IVF cycle prices between $12,000 and $20,000. Actuaries can mannequin this.
- Small employer well being plans usually don’t cowl fertility, so there’s a spot to fill. This avoids the complexity of going up towards an incumbent insurer.
- They’ve printed independently validated outcomes: Milliman-audited stay delivery charges, value per stay delivery, superior to nationwide benchmarks. They’ll underwrite confidently.
- They management the drug prices with Progyny Rx, the in-house PBM. They’ll negotiate drug pricing at scale and steer members towards cost-effective protocols.
- The credibility with employers has already been constructed. They named it Progyny Choose and never a brand new model. Choose sells by means of brokers, which is a brand new channel for Progyny, however with the model and outcomes monitor report of a decade.
- They’re a worthwhile public firm that may afford the capital reserves that must be locked as much as fulfill the regulatory requirement. In WA, that’s $4 million minimal.
There are a number of methods to cost optimally, however given the PR stated “pooled danger” and that they solely have two actuaries, I figured the PEPM wouldn’t be bespoke. Small fully-insured employers are consuming 10–13% premium increases on base medical YoY. I used to be curious whether or not Progyny can value low sufficient for a founder or Head of Folks to be satisfied when a dealer pitches “That is $xx PEPM you may promote as a differentiated profit, and it prices lower than shedding one worker to a competitor with fertility protection.”
Declared within the regulatory filings are their plans for a single pool with a 2-tier PEPM based mostly on whether or not the protection is for simply worker (and worker + youngsters because it doesn’t matter) priced at $11.15, or worker + partner (once more, with or with out youngsters doesn’t matter) priced at $30.17. This proposal, which projected the loss ratio to be 77% (aka 23% goes to admin, taxes, revenue), was “referred” for extra scrutiny. Shortly after, Progyny revised the loss ratio to be 102% and declared they anticipate this product to be a loss-leader that may ultimately flip a revenue. Within the meantime, the general public mother or father will bankroll the insurance coverage subsidiary. The PEPM tiers didn’t change, however the entire submitting continues to be beneath assessment.
However wait. Progyny isn’t only a fertility firm anymore. Over the previous three years they, like a number of others who used fertility as a wedge, have constructed out a full ladies’s well being platform with being pregnant, postpartum, menopause, and parenting. Choose contains all of it. Take menopause for example, which isn’t a discrete occasion. It’s power, ongoing, extremely variable care, and Progyny has at most three years of information on it. So how precisely are they underwriting this bundle? I went again to the launch messaging and options checklist. Fertility: “complete protection, together with IVF, IUI, and genetic testing.” Being pregnant, postpartum, parenting, menopause: “teaching,” which is solely care navigation and coordination. These are all worthwhile to members and enticing to employers, however the insurance coverage danger is scoped to fertility.
That’s key as a result of there’s a cautionary story from not too way back. Babylon Well being, an AI-based PCP triage firm, tried to turn out to be a risk-bearing supplier by acquiring ~50,000 capitated Medicare/Medicaid lives. They introduced it loudly in 2021 as a part of a $4.2B SPAC narrative: “the largest digital-first value-based care provider in the US.” They bolted a risk-bearing construction masking the most costly inhabitants in American healthcare onto a tech firm with out scientific infrastructure and price administration functionality. Two years later, they filed for Chapter 7 bankruptcy.
Again to Progyny. Alongside the fertility product, WA data present a second product submitting across the identical time that hasn’t made it into any press launch or media protection. A supplemental termination of pregnancy insurance meant to fill gaps for employers whose base service declines protection as a result of non secular objection. Whether or not this product has since been shelved, made out there by means of the dealer channel with out public fanfare, or staged for a later announcement, I don’t know. What I do know is that they declared to supply this at close to break-even (tier 1 at $0.12 and tier 2 at $0.32 PEPM), with a 96% loss ratio (remaining 4% income covers admin, taxes, revenue). It seems to be a low-cost, strategic door-opener to the fully-insured market that units up the connection for his or her core fertility product.
Who else can pull off the underwriter mannequin within the close to future? Carrot, Progyny’s direct competitor that launched when Progyny was signing its first handful of employer shoppers, might be a quick follower. I didn’t discover any full-time actuaries on their group, although. Maven Clinic began within the adjoining maternity house and added on fertility benefit management in 2024 as the entire market was pushing to personal the complete spectrum of girls’s well being. Maven and Progyny collided as they expanded outward, with each now competing head-to-head for self-funded employer budgets. Maven’s dataset is newer and thinner with seemingly a number of years earlier than a Choose-esque enterprise.
The info benefit that Maven does have is in what was their beachhead: maternity. Excessive-risk pregnancies, after they finish in preterm births and NICU stays, can value from $75,000 to over a million in excessive circumstances. Even with stop-loss insurance coverage, self-funded employers can blow by means of their finances in a nasty 12 months. Making use of the framework from above, being pregnant problems represent a discrete, high-cost tail occasion that base plans go away employers uncovered to, in a small share of the inhabitants, for which Maven has years of information to cost. Maven has a lane, however it’s more durable than Progyny’s as a result of the associated fee unfold is wider. Put one other approach, Progyny is taking utilization danger on discrete, priceable occasions. Maven could be taking tail danger on uncommon, catastrophic occasions.
Maven’s core product can handle this, although. Their maternity teaching would determine high-risk pregnancies early and route members to raised care. This is able to function the associated fee administration layer of the insurance coverage product, whereas unlocking insurance coverage margins (if performed proper) and market growth. To tie the 2 merchandise collectively, Maven may make protection conditional on a minimal stage of affected person engagement with their scientific program.
If this hypothetical supplemental insurance coverage is elective the best way hospital indemnity is, households who’re attempting to conceive or already pregnant, particularly these with identified danger elements, self-select in and collapse the pool. For a pooled supplemental plan to work, enrollment must be employer-sponsored and common, which is nearly definitely how Progyny Choose is structured.
Maven hasn’t proven their hand but. Once I began scripting this piece in Might 2026, I did discover one other digital well being firm with three actuaries on their group. Virta Well being added two actuaries in December 2025 and February 2026. Virta was distinctive in providing their diabetes reversal program at risk towards lowered HbA1c outcomes in order that they most likely wanted their early actuary for value-based care modeling. I puzzled if Virta actuaries had been merely scaling value-based care as the corporate was rising?
Protection for metabolic care is established in base plans however no entity is accountable to maintain spend low within the incentives recreation that healthcare is. GLP-1s for weight reduction are projected to be a source of uncontrolled costs for employers. In June 2026, Virta announced GLP-1 access for employers with ensures like 0% YoY utilization enhance and 1:1 claims-based ROI. Is Virta stopping right here, or is that this the intermediate step to full capitation?
Both approach, the indicators precede the press releases, if you already know the place to observe.
Disclaimer: This isn’t funding recommendation. I maintain no place in any firm talked about.
Deeksha Hegde is a bioengineer who writes about healthtech and digital well being on her Substack, connecting dots past the press releases.
