Online therapy provider Talkspace is making a big push into the Medicare market, rolling out to approximately 13 million members in 11 states.
The company is initially targeting California, Florida, New York, Ohio, New Jersey, Virginia, Missouri, Maryland, South Carolina, New Mexico and Idaho.
Talkspace plans to expand to all 33 million traditional Medicare members, coupled with several Medicare Advantage plans, across all 50 states by the end of the year.
The company sees significant opportunities to broaden its reach among Medicare beneficiaries as its mental health services can help address loneliness and depression among elderly seniors, Jon Cohen, M.D., Talkspace Chief Executive Officer, told investors during the company's fourth-quarter earnings call in February.
“The mental health crisis is generation-neutral, but loneliness and social isolation, which impact older adults more significantly, greatly impact their overall well-being and, in turn, raise their overall total medical costs. Given the alarmingly limited number of behavioral health providers that accept Medicare, Talkspace now opens up access to affordable, high-quality care for millions of Medicare members - within days - from the comfort of their own homes," Cohen said in a statement.
Talkspace connects people via an app with therapists who provide counseling remotely, either over the phone, by video chat or by text. The company has 5,600 licensed providers on its network, as of the first quarter of 2024. More than 140 million Americans have access to Talkspace through their health insurance plans, employee assistance programs, the company's partnerships with leading healthcare companies, or as a free benefit through their employer, school, or government agency.
With one in four adults aged 65 and older reporting anxiety or depression in 2020, a rate 2.5 times higher than pre-pandemic levels, the significance for mental health support for seniors is critical. Yet, a recent report from the Department of Health and Human Services has revealed that despite the unprecedented demand for behavioral health services, treatment rates remain relatively low and attribute the low rates to poor access as there are less than five active mental health care providers for every 1,000 enrollees.
And, many of the enrollees had to travel long distances to see their behavioral provider, which has historically been a known barrier to accessing care.
"This launch also enables primary care providers to begin more actively referring to Talkspace for their patients’ behavioral health needs as there are only a limited number of national virtual behavioral health providers addressing this population," Cohen said.
Medicare has 65 million lives, 33 million standard Medicare and 32 million in Medicare Advantage, according to Cohen. "We will be, we believe, the primary, if not only, large national telehealth medical provider that's going to be providing that service to the Medicare population," he told investors back in February.
The reception from payers has been "very positive," Cohen told investors lats week and the company is in advanced discussions to expand within their Medicare Advantage networks. "With Medicare, we will continue to lead as the platform advancing affordable behavioral healthcare," he said during the Q1 earnings call.
To serve the millions of 65+ Americans who have eligible Medicare plans, Talkspace said it made significant investments in its infrastructure, including expanding its network of licensed, qualified providers and building the infrastructure to meet Medicare claims requirements.
The company has doubled down on its strategy to grow its business with payers and employers with a focus on providing services to teens and seniors.
The company, which went public in 2021 via a special purpose acquisition company deal, reported strong revenue growth in 2023, bringing in $150 million, up 25% from 2022.
For the first quarter of 2024, Talkspace's revenue grew 36% to reach $44 million, driven by a 92% year-over-year increase in payer revenue, according to its Q1 financial results.
The company started in 2012 with a consumer focus, but, three years ago, it shifted its focus to a B2B model as part of a larger turnaround effort. That strategy shift appears to be paying off as the virtual mental health company says it is accelerating its path toward profitability.
Talkspace reported its first quarter of profitability on an adjusted EBITDA basis in Q1. The company is projecting 2024 revenue to be in the range of $185 million to $195 million, growth of 23% to 30%, and adjusted EBITDA to be in the range of $4 million to $8 million.