Plenty of folks get hit with hefty and unexpected medical bills they have a hard time paying. Earnin, a Palo Alto, California-based startup, thinks it can help.
The company, which already offers customers an alternative to high-interest payday loans, on Wednesday introduced a new service called HealthAid. It lets people take pictures of their medical bills and load them into Earnin's app. From there, the startup's team, which is trained in medical billing, will negotiate with doctors and hospitals for lower bills or installment payments. These workers will also try to line up financial aid through a medical provider if a patient qualifies.
Results can come as quickly as two business days and Earnin says it found savings for 90% of users, at an average of $100 per bill, during its HealthAid pilot.
What's Earnin charging? Nothing.
Yes, that's right, Earnin's business model is based on community-supported contributions. If you appreciate the service it's providing, you can tip the company at whatever level you think is fair; if you can't afford to pay or don't want to, you don't. The company follows the same model for Cash Out, it's main service providing short-term loans to people ahead of their paydays. Most Earnin users have tipped at least once, the company said.
"Our revenue model is customers voluntarily paying us," CEO and founder Ram Palaniappan said in an interview. "I don't think you should force fees on people that can't afford it."
This kind of work has the potential to shake up the financial industry, offering customers a way to avoid paying pricey banking charges like overdraft fees and sky-high cash advance loans. But, with Earnin still a new company (it was founded in 2012) it's hard to say whether this concept can last, especially during a tough market downturn.
Palaniappan says Earnin doesn't package and sell its users' information, which he said is securely protected. He also confirmed that it doesn't go into debt collection for anyone who doesn't pay back one of its short-term loans. He says fostering trust and community is working, with many people now using Earnin as their default financial app and the user base growing.
On the strength of this concept, Palaniappan has already raised nearly $200 million in funding from leading venture capital firms, including Andreessen Horowitz, according to Crunchbase.
People interested in using HealthAid, which has only 10 employees working on it for now, can sign up for a waitlist that opened Wednesday. Existing Earnin users can join starting in July and non-Earnin users will be able to use HealthAid by the end of the year.
"We're trying to help people get to a better place financially," Palaniappan said. "So we're fighting unfairness and financial inequality with technology. Wherever we see that, we're trying to play."