Dec 21, 2020,02:59pm EST|1,832 views Bruce Japsen Senior Contributor
Health insurer Oscar Health is
preparing an initial public offering of its common stock in 2021, according to
documents filed with the Securities and Exchange Commission.
Oscar said
Monday it has “confidentially submitted a draft registration
statement on Form S-1 to the U.S. Securities and Exchange Commission relating
to its proposed initial public offering of its common stock.”
“The size and price range for the
proposed offering have not yet been determined,” Oscar said
Monday. “The initial public offering is expected to commence
after the completion of the SEC review process, subject to market and other
conditions.”
The filing comes following a recent
announcement the company has raised
another $140 million and amid a major expansion of its health
insurance products into four new states and 19 new markets to sell coverage for
individuals and families in 2021.
The move into new cities and states
marks the fourth consecutive year Oscar is expanding into new markets and comes
as health insurance companies in the individual business reap an influx of new
customers losing their employer coverage during the Covid-19 pandemic.
Oscar’s niche has long been the
individual market of Americans signing up for Obamacare coverage sold under the
Affordable Care Act, which has become more attractive for 2021 amid the
recession and the surge of cases of the Coronavirus strain Covid-19.
Oscar was founded in 2012 by Mario
Schlosser, the company’s CEO, and Joshua Kushner, brother of President Donald
Trump’s son-in-law Jared. The two Oscar co-founders have found success
attracting new customers despite Trump’s effort to uproot the ACA by offering
health plan customers a mix of technology and new product offerings in the
individual and small group markets historically dominated by Blue Cross and
Blue Shield plans.
Under the incoming Joe Biden White
House, companies like Oscar that sell coverage on the ACA’s public exchanges
could become attractive and a potential acquisition target of a larger health
insurer so the IPO could do well.
Biden has vowed to bolster the ACA
and coverage sold under the historic legislation signed into law 10 years ago by
President Barack Obama. The incoming Biden administration could reverse
regulations implemented by Trump that have allowed cheaper health insurance
plans to be sold that aren’t subject to the ACA’s rules that Oscar and other
companies like Centene agree to by selling their coverage on the ACA’s public
exchanges.
In the last year, Oscar has stepped
up partnerships including a deal with health insurance giant Cigna to sell
coverage to employers. Oscar has also established relationships with
well-known providers of medical care like the
Cleveland Clinic.
Oscar currently sells individual
Obamacare coverage in 29 markets in 15 states. Oscar now has about 420,000
health plan enrollees across the country that includes about 400,000 in
individual plans, about 18,700 in small group plans and another 1,600 in Medicare
Advantage plans, a business the company entered in the last year.
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