Nick Gerhart was recently appointed CEO of Homesteaders Life Company.
A graduate of the University of Northern Iowa and the Saint Louis University School of Law, Gerhart served as Iowa’s Insurance Commissioner, and later as Chief Innovation Officer at Homesteaders before moving into his current executive position.
“Innovation is the life and heart of most of these companies,” Gerhart says, emphasizing the importance of modernization in a field often viewed as slow to evolve. He explains that without continuous innovation, “businesses are going to die, and “customers are not going to get served well.”
Gerhart was involved in one of the first insurance-focused accelerators a decade ago and has remained at the forefront of technological and service-oriented improvements in the industry.
He believes that insurance must become “simpler, easier, more affordable,” and that the traditional methods of doing business are insufficient in today’s market. “How we did business 20 years ago was not what’s going to work today,” he says. The evolving nature of consumer expectations, paired with regulatory complexity, means companies must find ways to meet people on new terms.
When it comes to health insurance, Gerhart says a new approach is needed. “It has become more of a ‘someone’s going to pay for what I need done’ system,” he says.
Drawing from personal experience—his father was a family physician—Gerhart recounts how healthcare demands have worn down providers. “By the end of it,” Gerhart says about his father, “he was willing to pull any of the hair out he had left.”
Gerhart critiques the design of health insurance, particularly when compared to models like auto or homeowner’s insurance. “You don’t expect State Farm to pay for your oil change,” he says.
The health system, he explains, is burdened by consumer expectations for full coverage, compounded by the complexities of Medicare and employer-sponsored plans. High-deductible plans and HSAs offer some flexibility, but Gerhart notes that regulation under the Affordable Care Act (ACA) has limited innovation in the individual and small group markets.
The strain on the healthcare system isn’t just economic. “You have a wave of retirements,” Gerhart says, pointing to the pandemic as a major accelerant. “Several docs in their late 50s to early 60s punched out [early].”
The shortage of providers makes innovation in preventive care and data analysis even more critical. “I’m a big fan of preventative medicine,” he says, adding that AI and machine learning offer potential to help consumers avoid costly emergencies through better decision-making.
Gerhart believes technology and AI platforms, while not substitutes for physicians, can help people “have an informed conversation with your doc.” He sees great promise in these tools for shaping more personalized and accessible healthcare options.
On regulatory structure, Gerhart—drawing from his experience as a former insurance commissioner—defends the state-based model. “The state-based system works fairly well,” especially in maintaining solvency and managing consumer complaints.
However, he acknowledges that interstate insurance competition, though theoretically beneficial, is harder in practice. “There’s definitely been a move in many states to realize the job’s important,” but coordination remains difficult.
He recalls a provision in the ACA—Section 1333—that encouraged state compacts to allow cross-border insurance sales. “Seven or eight states looked at doing that–I don’t think any did,” he says.
The real hurdle, Gerhart says, lies in provider networks and adequacy standards. “Can I as a new carrier come in and have a network that’s adequate?”
Even with reduced regulatory hurdles, without provider buy-in, competition remains limited. “Most of the volume… is really driven by a small group of players,” he says, noting that startups face nearly insurmountable obstacles breaking into markets dominated by large insurers like United or Cigna.
Gerhart also sees the issue of licensing healthcare professionals across state lines as part of the solution. “There’s definitely a need,” he says, describing scenarios where radiologists in one state could provide services for underserved areas in another. “Scans in Alaska look pretty similar to Iowa.” But doing this requires not only regulatory reform, but also updated payment systems and credentialing mechanisms.
Ultimately, Gerhart believes that the solution to America’s $5 trillion healthcare spend lies in incremental changes. “I’m a big believer in taking a small exacto knife,” he says, emphasizing that even a 20% savings would yield massive benefits. “There’s absolutely no way you can’t save 20% over the next couple of years if you were to lean into this.”
