Teladoc Expands Insurance Coverage for BetterHelp Across Seven States & Washington, D.C.

The move follows Teladoc’s acquisition of virtual mental health firm UpLift earlier this year, aimed at accelerating its ability to accept insurance for BetterHelp users.

Teladoc Health has expanded insurance coverage for its direct-to-consumer mental health unit, BetterHelp, across seven states and Washington, D.C., as part of efforts to make the service more affordable and attract new users.

The company expects insurance availability for BetterHelp to become “largely national” by the end of next year, Chief Financial Officer Mala Murthy said during Teladoc’s third-quarter earnings call on Wednesday.

Murthy added that expanding insurance options is an important initiative for the telehealth firm to strengthen financial performance at the mental health division, which has seen declining earnings and revenue in recent quarters.

The move follows Teladoc’s acquisition of virtual mental health firm UpLift earlier this year, aimed at accelerating its ability to accept insurance for BetterHelp users.

Analysts described the expansion as a positive sign, though the impact may take time. “The expansion is likely a positive, but it will take some time for meaningful contributions to materialize,” wrote Michael Cherny, analyst at Leerink Partners, in a note on Wednesday.

Teladoc reported $626.4 million in revenue in the third quarter, down 2% year over year, with a net loss of $49.5 million, compared with $33.3 million in the same period last year. Despite the dip, Cherny noted it was “a generally better quarter” for the virtual care company.

BetterHelp’s performance continued to lag, with adjusted EBITDA down 75% to $3.8 million, while revenue fell 8% to $236.9 million. Paying users declined 4% year over year, as competition in the virtual mental health space remains strong.

Murthy acknowledged the challenges, stating, “We are seeing heavy competition on that one from other participants in the market who offer insurance. It validates and reinforces the pivots that we are making in BetterHelp in offering insurance as an option.”

In Teladoc’s integrated care unit, which focuses on business-to-business virtual health services, revenue rose 2% to $389.5 million, while adjusted EBITDA fell 3% to $66.1 million. The segment recorded 9% membership growth year over year and a $12.6 million non-cash goodwill impairment charge linked to its acquisition of Australian telehealth firm Telecare this summer.

Stay tuned for more such updates on Digital Health News