Kaushik and Saumik Tiwari
In 2019, after injuring himself at a college rugby match, Saumik Tiwari and his big brother Kaushik founded a startup to help people pay for medical emergencies stemming from accidents. In a nutshell, users download an app, called betterbank.app, and arrange for their paychecks to be deposited in a special bank account. If they’re in an accident and have sudden medical expenses, they’re able to get up to $5,000 in cash, to fund anything from hospital charges to utility bills.
Then the coronavirus pandemic hit. So, although the app hasn’t even officially launched yet—the date is slated for the end of May—the brothers just made an emergency addition. For a minimal daily charge, users can also receive health insurance coverage.
“Even in a normal economy, people don’t have the resources to pay their bills if they can’t work,” says Kaushik. “Now everyone’s getting hit at the same time.”
Pivot to Medical Debt
It all started two years ago when the two brothers were accepted into Hartford Insurtech Hub, a three-month insurance technology accelerator program. They focused on launching a company aimed at selling more affordable disability insurance. But a year later, Saumik, a senior at Trinity College in Hartford, was injured during a rugby game. The upshot: $1,500 in medical and related bills he couldn’t pay, thanks to deductibles, co-pays and other expenses.
The ordeal convinced the two to change course. Their thinking: One of the biggest financial threats Americans face is a one-off emergency leaving them unable to work temporarily. That’s especially true for those with high-deductible health plans—and also for younger people. The average size of medical debt decreases nearly 40% from patients age 27 to 64, according to recent research.
With that in mind, they decided to build a tech platform that could provide a safety net and started a new company, Better Financial Corp. The focus: accident insurance, to help pay out-of-pocket expenses not covered by health plans (deductibles, rent and so on). Working with an FDIC-backed bank—the card issuer is Galileo, which has a payment processing platform; the name of the ultimate issuing bank is not being made public—users can build a checking account from which Betterbank will take a small percent, placing the rest in a community fund to pay out claims.
To be more specific, customers open up a bank account, in which they deposit their paychecks, and get a debit card allowing them to receive up to $5,000 in accident protection. (According to Kaushik, the average individual deductible is $4,300).
As for their additional coverage, when the pandemic hit, the brothers realized their users needed more. So they asked their insurance partner for a plan that could help with the medical expenses due to illness people might face. Now users will be able to pay $1 a day and receive coverage for all sicknesses.
In 2019 , the brothers received $20,000 from the Dorm Room student competition and they’re now in the process of raising more funding from other investors. While this might not seem to be the best fundraising climate, Kaushik, in fact, hopes the current crisis can be more of a help than a hindrance. “It was difficult to convince VCs that medical debt is a real problem until coronavirus hit,” says Kaushik. “We’re seeing huge inbound interest now.” At the moment, the brothers are still testing out the app with their team. According to Kaushik, he has a signup waiting list of about 7,000 people.
To Kaushik, the current crisis is a wake-up call. “It exposes a much more fundamental failing in our system,” he says. “And the problem it’s exposing is exactly the thing we’re trying to solve.”