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Tech Industry

Healtheon/WebMD enters insurance venture

The Internet health care company unveils a partnership with an e-commerce site that provides health insurance to individuals and small businesses

Internet health care company Healtheon/WebMD today unveiled a partnership with an e-commerce site that provides health insurance to individuals and small businesses.

Under terms of the deal, Healtheon/WebMD will receive $30 million over three years from Atlanta-based SimplyHealth.com to create a health insurance distribution service on WebMD.com's consumer portal, WebMD Health.

The service, the Health Insurance Channel, will not only provide consumers with access to a variety of health insurance information, but it also will enable them to purchase health insurance online.

"The service will save consumers a lot of time and make them more knowledgeable about buying insurance," said Rob Draughon, executive vice president of business development for Healtheon/WebMD. "SimplyHealth provides the choice and the marketplace for health care insurance because they've negotiated with different insurances and are always trying to bring in more insurers."

The Health Insurance Channel will target self-employed people, small-business employees, noninsured individuals and Medicare recipients. The service will also offer programs to help people cope with certain health disorders as well as guides to improve their lifestyles.

"We want to be viewed as an end-to-end destination rather than a pure reseller of health insurance," said SimplyHealth CEO Eric Grossman, who anticipates the service will begin in the next three months.

At a New York Internet health conference in April, Healtheon/WebMD co-founder and Netscape Communications veteran Jim Clark said he envisions an Internet platform that links all aspects of the health industry; he also promised the company will turn a profit this year.