- Cigna is partnering with tech-savvy payer startup Oscar Health to jointly sell commercial health plans to small businesses as the Bloomfield, Connecticut-based payer looks to capitalize on Oscar's simplified strategy to expand its footprint in the small group market.
- The partnership, branded as "Cigna + Oscar," includes integrated medical, behavioral and pharmacy services along with access to a high-performing network of providers.
- The two payers will share risk under a reinsurance agreement. The co-branded plans will launch in select markets this year pending regulatory approvals.
New York City-based Oscar bills itself as a "new kind of insurance company." Founders Mario Schlosser and Josh Kushner, brother of White House adviser Jared Kushner, sell the brand as more consumer friendly in an attempt to disrupt traditional health insurance.
Oscar offers both on- and off- Affordable Care Act exchange individual plans in nine states, plus small business plans in New York, New Jersey, California and Tennessee and plans in Medicare Advantage. The eight-year-old startup has won some praise in reviews for its member resources, like a fast registration process, digital tools and customer service with a concierge team and nurse for each member.
However, Oscar has been slammed for limited availability and types of plans. Oscar doesn't provide dental or vision coverage and doesn't work with Medicaid beneficiaries. The privately held company has also been criticized for small provider networks.
The partnership with Cigna, which boasted 16 million members in 2018 and owns pharmacy benefit manager Express Scripts, will allow Oscar to use Cigna's heft to expand into new markets, though Cigna isn't a major player in the small group space, which includes business with one to 100 employees.
In most states, Cigna offers group insurance coverage to employers with more than 50 full-time employees, according to the payer's website, and some back-end help to those with 25 employees and more. However, the company wasn't one of the largest three insurers in the small group market for any state in 2018, according to a Kaiser Family Foundation analysis of insurance data.
Brian Henry, a spokesperson for Cigna, told Healthcare Dive the partnership stems from the rationale that Cigna and Oscar can collectively do more in smaller markets than each would have been able to do alone.
The payers are betting ongoing growth in the sector will spur revenue. More than 500,000 new companies launch each month, according to the announcement. Offering comprehensive benefits is one method to attract and retain talent in today's robust economy, but only 30% of businesses with fewer than 30 employers offer health insurance, the companies said.
About 15 million people in the U.S. are covered by small group health plans.
Oscar currently has 400,000 members and expects to bring in $2 billion in revenue by the end of this year, according to its Monday presentation at the J.P. Morgan Healthcare Conference in San Francisco.