The Startup Bringing AI Voice To Medicare
Y Combinator alum careCycle thinks its AI calls are better for Medicare policy sellers and senior citizens alike. Now it's raised $2 million to build a Medicare-focused CRM.
Startup founder Alex Doonanco follows a simple philosophy: a helpful robot is better than an unhelpful human. But there’s a third option.
“People are used to an unhelpful robot, and that’s worse than anything,” he tells Upstarts.
Over the past year, Doonanco has worked on a startup building in an area where he thinks those useful bots could have an immediate impact: Medicare. His startup, careCycle, provides voice AI tools for companies that sell senior citizens health insurance plans under the program.
For the sellers – brokers and agencies – Doonanco provides better pre-screening and personalization that can boost sales and retention in a fiercely competitive category. For the seniors who need care, he promises a better experience: personalized communication that knows their plan and needs, and faster answers to coverage questions.
“This is a huge industry, to the tune of tens of billions of dollars. So these call centers can use quite aggressive angles to generate a lead, over places like Facebook,” Doonanco says. “You end up with a mismatch in expectations. I’ve heard calls where consumers are calling in about DOGE giving out dividends.”
CareCycle’s voice AI has already processed one million conversations as of August, doubling its total over the past month. It’s cleared $1 million in ARR with just a team of four employees and an “army” of part-timers.
But the startup has bigger ambitions to become a one-stop shop for Medicare businesses, offering a new system of record that doesn’t just maintain context for calls, but handles the customer records and dialing, too.
Today, Y Combinator alum careCycle launches that new product, alongside $2 million in funding from investors including Strike Capital and Pioneer Fund, an alumni fund for YC founders.
It’s a small round by AI standards, but with big ambitions to build a new CRM in a potentially lucrative niche. And as a voice AI startup for a regulated vertical, careCycle merits watching as a test patient itself.
Upstarts has written extensively about how startups are spreading AI tools within go-to market use cases like outbound sales and growth marketing. Another way to wedge open the door is to focus on a wonky vertical. We expect to see startups go after more across healthcare, life sciences and in other markets dependent on phone sales.
In that sense, careCycle’s early traction could provide a playbook already. It certainly has the ambition needed of an Upstart. “We hope to be like Perplexity competing with Google,” its CEO says. More on that below.
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Voice vocation
CareCycle really got going last fall when Doonanco, a Canadian citizen, took a three-day road trip back from the Bay Area to renew his visa. A fluent Mandarin speaker, Doonanco had worked in various analyst and advisory roles before leading U.S. expansion for AI Rudder, a voice AI automation startup based in Singapore.
Taken by the opportunity to use large language models and voice tools in different business functions, he’d started to build out different automations for its practical use; one for loan underwriters, for example, made Doonanco some money by shaving several minutes off the client’s calls.
But healthcare, and specifically Medicare, seemed a bigger opportunity. A number of startups, including J.D. Vance-backed Chapter Advisory, worked on the selection side, helping consumers to choose plans from the major insurance carriers by providing them with advisors.
What about AI voice tools for advisors themselves? As many as 65% of the brokers and agencies in the market still consisted of small businesses and independent operators, Doonanco says he learned. From his road trip, Doonanco called a technical friend, Evan Roubekas, with a pitch: I’ll teach you voice AI so we can attack this.
CareCycle initially launched as a way to better respond to incoming or after-hours calls, offering automated appointment booking, pre-screening for relevance, and personalization within follow-up chats.
And whereas a senior might only hear from their agent once a year to discuss renewal, careCycle could automate check-ins in the weeks following, while also providing a hotline for any mid-cycle questions about coverage that might otherwise lead a senior to be susceptible to unnecessarily changing plans.
The stakes are high enough that a business as small as 5 to 10 employees will gladly pay $10,000 per month; careCycle achieved $70,000 in revenue in its first month of operation. The company went through Y Combinator this past winter.
“What I find so compelling about voice as the final user interface is that there’s no learning curve,” Doonanco says. “You can ask in natural language, just like you learned when you were a baby. You don’t need to click a bunch of buttons, or log in to your phone.”
Last Friday, Doonanco was hands-on with a customer that was working with consumers with such questions. “When we hear people say, ‘thank you, sweetie, have a great day at the end of the call,’ it blows our minds,” he says. “That’s why we do this.”
A new nervous system?
The biggest challenge for careCycle: hooking up its tools for a customer across their various software products like a CRM such as HubSpot or Salesforce. Those integrations take time, and work by forward-deployed engineers, pushing the startup more into managed services than simply offering technology.
The startup’s answer – and the way for it to expand its addressable market – is to get into that game itself. Doonanco aspires to offer more tooling to customers to cover the actions they’d take around its info – the logging of customer info, the potential upselling of additional business, the call dialing itself.
“We don’t need to charge by the seat for the CRM; we can just give it to them for free,” he says.
Carving out a niche against the big systems of record isn’t impossible, but it’s an uphill battle that we’ve heard startups claim, then back away from, many times over the years. It’s good to have goals.
Louis van Hove, an investor at Strike Capital, says he believes that careCycle’s niche focus is a plus. “I think it’s going to be very difficult for horizontal players to offer that kind of complexity or feature options,” he says. But even he notes that the startup is just setting out on this path.
“I think they’re well positioned, but at this stage, it’s really all about the founder,” van Hove adds. “Alex is boots on the ground.”
The Upshot
For other startups, Doonanco is a believer that AI voice will unlock more opportunities in other verticals. His advice for others: make sure that the tool being built will benefit from LLMs growing more advanced, not face them as opposition, meaning regulated areas are a good starting place. Next, the bigger question: “are you building something that actually changes the unit economics of the business you’re selling to?”
Another factor to consider for any startup looking to bring voice AI to a vertical: the ethical implications of such tools. CareCycle announces its agent at the start of a call. Upstarts finds it easy to picture some seniors failing to understand, or quickly forgetting, that they’re talking to an AI agent.
“Philosophically, that should give people pause,” Doonanco admits. “Our philosophy is that we’re not just replacing variable values to make it feel personalized,” he says.
But the startup also has to maintain guardrails on how its tools are used. “We don’t have a platform where customers can go in and build any type of voice assistant they want for that very reason,” the CEO adds.
Ok. In all seriousness, until reading this article I didn’t realize that AI is a 100% must have tool to work through the selection process in our healthcare system. All those small parameters that you never fully understand, the impact of the new modules that we don’t know the full affect of until we start using the insurance. Asking an AI tool to ingest all of your requirements, the medicine you take and then request an analysis of which plan is the best fit for you - that’s the slam dunk use case!