It’s hard to believe how far we’ve come in just a year. Looking back at 2024, I’m reminded of a moment in Q4 when we received a note from a small business owner who had just enrolled in an Arlo health plan. They told us how switching to an Arlo-powered plan not only saved them money but also allowed them to offer comprehensive health coverage to their employees for the first time ever. Moments like these remind me why we started Arlo - to make affordable, high-quality health care accessible to more people. I finally found some time to reflect and look back at some of the things we have achieved and learned from the last year of building a health insurance startup.
This year has been a whirlwind. From launching our industry-leading online quoting platform to partnering with some of the best stop-loss carriers in the industry, we’ve come a long way - and I am proud of the entire Arlo team that got us here. We’re starting 2025 with over 200 small and medium-sized businesses covered under an Arlo-issued policy, and this is just the beginning.
Building a new, modern health insurance company hasn’t been easy - it has been full of challenges, pivots, and hard-learned lessons - but it’s also been incredibly rewarding. As we step into 2025, I wanted to take a moment to reflect on our journey and share some insights we’ve gained along the way. I deeply respect the many fellow builders in this space, and I hope some of these lessons resonate and prove helpful.
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Lessons 1: Finding our Focus - Building an AI-based Underwriting System
From the beginning, we knew that to fundamentally change how people experience healthcare, Arlo needed to be a health insurer, not a point-solution vendor making incremental tweaks. This decision meant taking on significant responsibility (and financial risk), but we believe it is the only way to make a meaningful difference. At the same time, we recognized the danger of trying to solve every problem at once or focusing on problems that we don’t have the expertise to solve.
For Arlo, this was an important journey to truly understand where our value proposition is, which parts of the health insurance stack we need to own, and which parts we can partner with other organizations. Ultimately, we realized that we could be the best in the world at building an AI-powered underwriting system and deriving actionable insights from data. At the same time, we found invaluable partners in the form of TPAs and regionally-rooted health plan architects to jointly deliver first-class, community-based health plans. By focusing on what we do best and collaborating with others, we’ve found our unique place in the healthcare ecosystem.
One key lesson we've learned is that the U.S. healthcare system is a complex maze of various stakeholders, regulations, and incentives. It’s filled with countless problems that demand solutions. But not every problem is worth solving—many are just symptoms of deeper issues and can be highly misleading. To truly make an impact, you must identify and address the root causes. This often means expanding your scope but without overextending yourself.
Lesson 2: Counterpositioning - Transparency & Eliminating Random Fees
The health insurance industry is dominated by a handful of powerful players. In many geographies, the BUCA carriers (Blue Cross Blue Shield, UnitedHealthcare, Cigna, and Aetna) control over 75% of the market. Competing with such giants can feel daunting, but we’ve learned that the key isn’t to outdo them at their game—it’s to play an entirely different one.
At Arlo, our counterposition is transparency. The major carriers are notoriously opaque when it comes to sharing data on their population. They keep employers and members in the dark, concealing hidden fees like spread pricing on pharmacy benefits, retained rebates, and out-of-network repricing charges. They also rarely disclose the true effectiveness of their population health programs, leaving employers guessing about rate increases year after year.
We’ve taken a different approach. As a lean, technology-driven startup, we’re not burdened by the administrative bloat or shareholder pressures that force traditional carriers into secrecy. We don’t rely on hidden fees or arbitrary charges to sustain our business. Instead, we’re committed to being fully transparent about costs, performance, and how we allocate healthcare dollars.
This transparency isn’t just ethical - it’s competitive. By eliminating unnecessary fees and cutting out inefficiencies, we can offer a more affordable, higher-value product to employers and their employees. For our members, this means access to health plans that are not only cost-effective but also built on trust and clarity. In an industry where opacity is the norm, transparency is our superpower.
Lesson 3: Collaboration - Fixing the Payer & Provider Relationship
One of the biggest challenges in U.S. healthcare is the fractured relationship between payers and providers. Both sides often view each other with suspicion: providers accuse health insurance companies of denying necessary care to increase their profits, while payers argue that providers charge unreasonable prices and overtreat patients without improving health outcomes. This mistrust has created a multi-billion-dollar industry focused on fighting each other - revenue cycle management (RCM) vendors on the provider side and fraud, waste, and abuse (FWA) systems on the payer side. The result? Billions of healthcare dollars are wasted on administrative overhead rather than patient care. This trend will only worsen with more and more AI-based systems coming to market that claim to help either side streamline their process.
At Arlo, we believe this relationship can and must be repaired. Instead of working against each other, health insurers and providers should collaborate to deliver cost-effective, high-quality care. Providers know what needs to be done to achieve the best health outcomes, and health insurers have critical data and insights that can help allocate healthcare dollars more efficiently. When these two sides work together, everyone benefits: patients, employers, and the healthcare system as a whole.
There are two key paths to fixing this relationship:
Align financial incentives through creating “Payviders”: Unfortunately, for many health systems, the commercial employer population is a profit center. However, there are excellent examples of how health systems can profitably take on risk and provide cost-effective and high-quality care. Here is a great video by Eric Bricker on how Ochsner Health has done it.
Partner with independent multi-specialty direct care providers: There’s a growing movement toward direct primary care, and for good reason. These models empower providers to focus on proactive, personalized care, prioritizing prevention over reactive care. This approach keeps people healthier, reduces hospital visits, and emphasizes preventative care - ensuring healthcare dollars are spent where they make the greatest impact.
We’ve seen the power of collaboration through our partnerships with highly accountable, direct primary care organizations. By closely working together, we provide them with benchmarking data and cost-saving insights, and they find innovative clinical pathways that reduce costs without compromising care. These relationships are not only productive - they’re a glimpse of what’s possible when insurers and providers truly work together.
Lesson 4: Go-to-Market - Getting the Right Partners
If you’re selling through employers, brokers are a key part of the equation. Yet, in the world of healthcare innovation, brokers often face criticism: “They’re not open to innovation”, “They serve their own interests, not their clients” or “They’re just unnecessary middlemen pocketing commissions.” While frustration with some benefit brokers is understandable, it’s far more productive to view brokers as partners rather than adversaries.
At Arlo, we’ve found that brokers play an invaluable role as trusted advisors to their clients. Healthcare is a deeply personal and often intimidating space; employers rely on brokers to help them navigate their decisions. This makes brokers uniquely positioned to explain why an innovative solution like the Arlo plans is worth the change, easing fears about risk and uncertainty.
Brokers also bring insight. They know which clients are ready to embrace something new and which ones may need more time. For a startup, this is gold - working with early adopters saves time and builds momentum while chasing clients who aren’t ready can drain resources.
We’ve built strong relationships with the broker community because we understand their value. Brokers are not just conduits for sales; they’re allies in introducing much-needed innovation to employers and employees alike. In many situations, they are co-builders of the product we bring to the market. By working together, we’re not just delivering a product—we’re transforming how businesses think about health benefits.
Arlo in 2025
Reflecting on everything we achieved in 2024, I’m both proud and motivated for what lies ahead. This past year laid a strong product and financial foundation, but we’re just starting. In 2025, we’re doubling down on our mission to transform healthcare and make it more affordable, accessible, and transparent for businesses and their employees.
Here’s where we’re focusing our efforts:
Advancing our technology and data infrastructure: We’re finding even smarter ways to leverage AI and data to tackle rising healthcare costs and streamline the customer experience.
Deepening broker & partner relationships: We’ll continue to collaborate with brokers across the U.S., empowering them to bring innovative solutions to their clients.
Expanding clinical programs: We’re investing in programs that ensure every healthcare dollar is spent where it matters most, delivering maximum value for our members.
2025 is about growth—growing our team, our partnerships, and our impact. If you’re passionate about solving big problems, applying cutting-edge technology, and improving people’s lives through better healthcare, I’d love to hear from you (just reply to this email, or if you read this online, DM me via LinkedIn). We’re actively hiring for engineering, sales, and clinical operations roles, so check out our career page and join us on this journey to reshape healthcare.
Health insurance is a brutal place to learn that the product is only half the company. Distribution, trust and the boring operational details decide whether anyone ever feels the benefit. I like that this focuses on what building actually taught you, not just the launch story.