GoHealth Helps Medicare Customers Prepare For The Future

Chicago-based GoHealth uses technology to support its mission to “improve access to healthcare in America.” The company focuses primarily on the Medicare marketplace rather than individual and family plans, to cater to an aging population. Healthcare enrollment can be a confusing process and for many customers, enrolling in the wrong plan can lead to significant costs down the road. GoHealth agents aim to connect patients to the right providers and medications.

The company has been around since 2001, when cofounders Clint Jones and Brandon Cruz were working out of their homes and still relied on a completely paper-based system. GoHealth’s origins lie in software, which Cruz and Jones developed before putting together their own agency. They sold individual healthcare plans initially, and were even the largest enroller of Affordable Care Act plans at one point in time.

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This week, the online insurance company debuted its IPO to the tune of $914 million under the ticker GOCO, far exceeding the $751 million they were hoping to raise. The IPO offered 43.5 million shares priced at $21, which was a little higher than the previously estimated range of $18-$20. Its current valuation is $6 billion. Lead investment banks include Morgan Stanley, Goldman Sachs, and Bank of America Securities.

GoHealth has seen a lot of growth lately, with a 104% increase in net revenue in the first quarter of 2019 ($141 million), and 138.5% growth overall in fiscal year 2019, for a total of $539.5 million. Last year alone they produced over 42 million customer interactions.

Cruz said that their primary motivation for going public was to cultivate brand recognition and make them more of a household name. “We don’t have any specific objectives as far as M&A, but we’ll keep our eye open if anything strategic comes along,” he said, though they have indicated that a portion of the new revenue will be used to catalyze growth. They expect revenues between $118 and $130 million by the June 30th quarter, which would put them up 66% from the same time last year.

The stock market has finally started to climb again after taking a massive hit from the COVID-19 pandemic.