Patrick Quigley, the chief executive of Sidecar Health, wants Americans to know the real cost of health care.

One of Sidecar's big selling points is that its platform promises to bring more transparency to medical costs, which can be confusing and murky. Sidecar users can compare doctor pricing in their area to their "benefit amount," which varies depending on the plan. Regardless of the treatment cost, each plan will pay a fixed amount per service.

"There's such a great need for affordable healthcare and improved access," said Quigley, who co-founded the El Segundo-based startup two years ago with Veronica Osentinsky. "People don't know there's an option out there that is so much more affordable than the traditional approach to insurance."

Sidecar Health, which last month announced a $20 million raise, manages and sells fixed indemnity insurance plans. The indemnity plans allow users to see any doctor they wish and pay directly for care using the Sidecar Health Visa card. It is neither a broker nor regular insurance, according to the company, rather it partners with insurance companies acting as their administrator.

Unlike traditional insurance that covers a range of services and then offers a deductible, indemnity insurance makes users pay upfront for a certain amount of coverage and then bills them for anything over that amount. If a provider charges less than that fixed amount, the difference is added back into the user's account or sent to them by check.

These pay-for-service plans have risen in popularity since the Trump administration loosened requirements for Americans to carry a certain type of health insurance. The change made it easier for people to buy lower cost products like indemnity plans.

But some experts think the plans, which are cheaper than traditional insurance and not regulated in the same way, carry risks.

Glenn Melnick, a USC professor and expert in health care policy told dot.LA that these plans, which are appealing because they're so cheap, are typically not good values for the consumer. He does, though, support the idea of developing tools for consumers to shop more effectively.

"Typically, indemnity products are low-value products for consumers," he said. "They typically return 50 cents on the dollar. Traditional major insurance is anywhere from 80 to 85 percent returned to the consumer in terms of benefits."

Melnick says consumers of these plans usually look like 25-year-olds who don't expect to need very much coverage. "They buy this so at least they have something, but they never expect to use it. In the event they have to use it, they learn the hard way when they're stuck with a lot of bills."

Sidecar spokeswoman Ruba Elagazy said that the company initially planned to target millennials, but has seen more families, customers over 40 and even small businesses enroll in its plans.

Before Sidecar, Quigley and Osentinksy owned Katch, a software platform that helped brands engage and monetize website visitors. Over a period of several years, the company helped 30 million consumers shop for individual health plans, Quibgley said.

"What came out of that whole process is that there just wasn't a good option for so many people," he told dot.LA.

They identified the three things consumers wanted most: an affordable option, the freedom to see their own doctors and a guarantee that they wouldn't be surprised by unexpected bills. Users can add the insurance anytime, unlike regular health coverage.

The company, which now operates in 11 states, says its members will save around 40% compared to traditional insurance schemes. It is not offered in California, where under state law residents must carry health insurance that meets minimum coverage thresholds. Sidecar doesn't qualify.

Quigley says with the new funding, Sidecar plans to expand its team and step up marketing efforts. In April, the company brought on former 23andMe executive Jon Ward as Sidecar's VP of Marketing. This third round brings the startup to over $40 million in funding.

"We've been able to scale across 11 states because there's such a great need for affordable health care and improved access," Quigley said. "When we think about the pandemic, it's an opportunity for us, as a company that takes our mission very seriously, to help a ton of people right now."

The funding round was led by Cathay Innovations and backed by investors including Comcast Ventures, Kauffman Fellows and Anne Wojcicki, co-founder and CEO of 23andMe.

**This is an updated version of an earlier one that appeared on the site.