Not so different after all: Losses lead Oscar to market pull-outs
- Oscar Insurance Corp., the startup that has positioned itself as a consumer and technology-centered new take on health coverage, has turned out to suffer the same marketplace challenges as everyone else in the individual market and is now resorting to the same tactic as many of the traditional industry leaders by reducing and rethinking its marketplace participation for 2017.
The insurer announced Tuesday it will stop offering its plans in the Dallas–Fort Worth, Texas market as well as New Jersey beginning January 1, 2017. It will continue to sell plans in New York; San Antonio, Texas; Los Angeles and Orange County in California; and it will expand to San Francisco.
- The company blamed the ACA's individual market, saying it "isn’t working as intended and there are weaknesses in the way it’s been set up,” CEO Mario Schlosser told Bloomberg.
The move comes as part of the company's efforts to re-strategize after suffering continued marketplace losses, including its recently announced losses from the first half of 2017 which included $52.2 million in New York state, $17.9 million in Texas and $12.9 million in California.
The New Jersey and Dallas market exits will impact a significant portion of Oscar's enrollees. Of its 130,000 total customers, 26,000 were in New Jersey and 7,000 were in Dallas, Bloomberg reported. Schlosser said Oscar is leaving New Jersey because it didn't have a narrow network there to contain costs, and leaving Dallas because its market has been too unpredictable.
One major difference currently between Oscar and its mainstream competitors such as UnitedHealth, Humana, and Aetna, which are also pulling back for 2017, is that it doesn't have other business beyond its individual policies to fall back on--but it plans to change that by offering small group insurance across most of its 2017 markets.
"Some of this is really looking at our opportunities and trying to pursue more aggressively the small-group market,” Joel Klein, Oscar's chief policy and strategy officer, told Bloomberg. “It’s a little bit of a re-balance given the underlying market forces.”