Dive Brief:
-
Industry disruptor Oscar Health recently notified insurance brokers it would be adjusting its commission rates, reports Crain's New York Business.
-
Rates will be slashed to less than half, as the insurer reduces brokers' payments from $14 per contract each month for individuals and a high of $26 for families to a flat $6 per contract each month for all individual and family policies, Becker's Hospital Review notes.
-
The cut follows news Oscar lost $41.5 million during the first three quarters of 2015, even though it doubled its revenue and its New York membership, and saw fees for hospital benefits and drugs triple, Becker's adds. The company lost $27.5 million in 2014 and has previously predicted profitability by late 2016.
Dive Insight:
Oscar stated the reductions were necessary due to marketplace instability.
"We recognize this will add to your challenges at an already difficult time," Oscar wrote to insurance brokers. "Given the unprecedented circumstances in the market, this change is necessary to ensure we are able to grow our business in a controlled manner and can continue to offer a great experience to all of our members."
Oscar's success in drawing New York membership has been cited among the reasons for the failure of the state's health co-op, Health Republic of New York, Beckers notes. It reports Long Island-based JayMar Insurance Agency owner Jason Samel has seen about 80% of his clients enrolled in Oscar, including former Health Republic members.