Carrot Founder and CEO Tammy Sun didn’t start out with an ambition to hit the reset button on how fertility is financed in the United States, because when she first dipped a toe into the world of fertility treatments, she didn’t realize just how expensive, confusing and friction-filled the system could be. Like most people who have never dealt directly with fertility services, she didn’t know all that much about it or think about it all that often.
But when she entered her mid-30s and began considering freezing her eggs to extend her fertility, she very quickly saw just how much she had to learn about the process.
“I went to my fertility doctor, gave him my insurance card, it was rejected, and I ended up paying $500 for my appointment on my credit card. That’s when I first realized, ‘Wow, I might have to pay a lot of money for this’,” she said.
And in fact she did. From that first high-cost consultation to the end of the process, Sun ended up paying around $35,000, all out of pocket. The expense was considerable, but it wasn’t just the price that hit her hard. It also felt kind of unjust, she said. She was a healthy, active consumer who had never been ill and on the whole asked very little of the healthcare industry.
She soon learned her experience, while unpleasant, was not uncommon. Only eight states require insurers to cover IVF (in-vitro fertilization) fertility treatments in employer-offered plans. And even in states that have such regulations, Sun noted, the contours of the rule really only addressed one kind of fertility issue — heterosexual couples who have an infertility diagnosis looking for IVF treatment. The issues facing single women and the LTBQ community, she said, often fall outside of those insurance mandates.
Carrot was founded to make fertility care — the whole range of services — more accessible to anyone who needs them, which early research quickly indicated meant making said access more affordable because cost immediately emerged as the single largest and most consistent barrier to entry.
And while Carrot is not unique in its goals — there are a variety of startups like Future Family and Modern Fertility looking to make the vertical more accessible with more affordable services and creative financing options — it is unique in the customer it pursues. While most of its fellows in the field are consumer-facing, Carrot’s target customer isn’t individuals looking for fertility treatments or data. Carrot works directly with employers, to help create what are essentially fertility savings accounts for their employees.
That approach, Sun explained, came from her own early days in struggling with egg freezing. Before she resigned herself to paying fully out of pocket, she went to her employer’s HR department to see if she could get any help. Although the HR department could not help, they clearly didn’t lack interest in the issue, they just had no direct way of addressing the problem in-house.
And that, she said, has been her experience over the last four years — no one has ever shut the door in her face totally uninterested in the issue. Five years ago, she said, this wasn’t a topic anyone was really talking about.
Employers, she noted, are interested in offering the benefit — but not in managing it, as it is specialized, highly regulated and complex. Carrot is the expert intermediary force that works with firms to create employee fertility plan benefits for their employees. Those packages of benefits can range from $5,000 to $100,000 that employees can spend at approved Carrot provider locations on a variety of treatments.
Originally the system was built around reimbursements — the employee would spend the funds out of pocket and be reimbursed via check by their employer. Sun reported that process of reimbursements was the least favorite part of the entire program for both employers and workers, who complained it was “too slow on the one hand, and too time consuming on the other.”
That process has recently been replaced by the Carrot Card — a Visa branded debit card that essentially allows employees to spend their fertility benefits directly with approved providers. Employees like the directness, while employers, she noted, like being more or less out of the flow of both payments and data once they’ve set up the program and handed off the card to their workers.
Four years ago, Sun said, she was still explaining why fertility care was a universal healthcare problem. Today she is making that sales pitch a lot less than she was even a year ago. But she said there are plenty of challenges ahead — and many more friction points in the process to iron out, though the card product will be a big first step in that direction.
Most critically though there is still a large field totally unaddressed. Around 80 percent of people undergoing fertility treatments in the U.S. are paying wholly out of pocket for them and going into debt to do it.