Google’s fastest-growing enterprise is insuring firms towards their employees’ well being

I’ve heard individuals joke that Google solely has a few profitable companies, primarily promoting. However it could have discovered one other hit: insuring different firms towards their employees’ doubtlessly expensive medical care.

The Info is reporting that its healthcare firm, Verily, greater than doubled its income to grow to be the most important Alphabet subsidiary after Google correct — and that its medical insurance enterprise, Granular, is the most important contributor to that development. Granular’s income “rose almost sixfold by means of the primary 9 months of final 12 months to $151 million, from $27 million a 12 months earlier,” writes The Info.

However Granular doesn’t promote medical insurance to workers. It sells “stop-loss” insurance coverage to employers who’re nervous that their very own employees’ medical claims would possibly harm them.

See, not each firm helps their workers pay for conventional insurance coverage premiums the place your docs invoice, say, UnitedHealthcare or Anthem or Aetna in your care (although these firms could also be middlemen anyhow). Some suppose it’d be less expensive to “self-fund” and pay the medical claims of workers themselves.

Anyhow, Google / Alphabet / Verily’s Granular Insurance coverage is considered one of many stop-loss insurance coverage firms that promise to pay claims over a sure greenback threshold in change for its personal common premiums. Sure, meaning firms that enroll are paying for insurance coverage as a substitute of paying for insurance coverage — they’re betting that almost all workers gained’t have sufficient claims to justify conventional insurance coverage premiums but additionally betting that some employees may need large ones.

What makes Granular totally different from different stop-loss suppliers? That’s much less clear. The corporate advertises that “Granular makes use of an clever framework to higher shield self-funded employers from the price volatility of a workforce with numerous health-related wants,” however I feel that simply means it’s cheaper. I dug up some native authorities assembly supplies from the San Joaquin Valley Insurance coverage Authority in Fresno County, California, and so they largely gave the impression to be contemplating Granular to switch their present stop-loss supplier as a result of the supply was aggressive.

However maybe it’s extra aggressive as a result of Google thinks its knowledge makes for extra correct bets. The San Joaquin Valley Insurance coverage Authority notes that Granular could be offering its service alongside “Point6,” which seems to be this firm that claims it “brings actionable and built-in options centered on the 0.6% of the worker inhabitants that’s driving 35% of employer healthcare expenditures.”

Both manner, it’s not precisely the picture that I sometimes affiliate with Google’s well being efforts. Initially, Verily was most intently related to the dream of a sensible contact lens that’s lengthy since been shelved.