June 21, 2018
Dive
Brief:
- Oscar
Health plans to expand its individual health
insurance offerings in 2019, subject to regulatory
approval. The health insurer filed to add six new markets in three states
(Florida, Arizona and Michigan) and three large metro areas in Ohio,
Tennessee and Texas.
- The
expansion plan would give Oscar overall coverage in 14 markets in nine
states.
- Oscar signed up 250,000 members
this year, doubling its individual insurance markets.
Dive
Insight:
Oscar’s
growth plan comes as Republicans on Capitol Hill and in the White House
continue to rail against the Affordable Care Act (ACA).
Though
Congress failed to repeal and replace the ACA last year, they did manage
to kill the individual mandate penalty for 2019. The mandate was a key (though
unpopular) part of the ACA. Some conservative lawmakers reportedly plan
on taking another run at the ACA again
this year.
In
addition to Capitol Hill, President Trump continues to bash the program. Trump
took multiple stabs at weakening the ACA last year, including ending
cost-sharing reduction (CSR) payments to insurers, cutting the open enrollment
period and reducing the program’s outreach and marketing budgets.
All
of this has caused uneasiness among payers. Major insurers
like UnitedHealth Group, Aetna, Humana and Anthem pulled back or
completely out of the exchanges for 2018.
That
wasn’t the case for technology-focused Oscar. The New York City-based
payer has grown in both the ACA marketplace and in other insurance areas over
the past year.
Oscar expanded to
Cleveland, Austin and Nashville and returned to New Jersey in 2018. The company
also opened into other insurance markets,
including small business and Medicare Advantage. The
payer additionally partnered with Cleveland Clinic and Humana to offer
co-branded health plans.
After
years of losing money, the payer reported a profit in the first quarter of this
year. It also significantly improved the company’s medical loss
ratio.
In
a blog post announcing the latest
expansion, Oscar Health CEO Mario Schlosser said healthcare faces
regulatory uncertainties, but the company remains focused on consumerism and
creating a more affordable system.
The
ACA exchanges will once again see large increases next year as payers in
multiple states have proposed double-digit increases in
2019. Critics charge that the premium hikes are connected to the demise of the
individual mandate penalty and proposed the expansion of Association Health
Plans (AHPs) and short-term plans.
A recent joint report from
the Center for Health Policy at the Brookings Institution and the USC Schaeffer
Center for Health Policy & Economics predicted that ending the mandate
could result in millions dropping or losing health insurance in the coming
years. Another recent report from
the Society of Actuaries said expanding AHPs will lead to up to 10% of people
in ACA plans to leave the marketplace for lower-cost AHPs.
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