Oscar Health will double the market reach of insurers

Oscar Health is doubling its “market footprint” over the next three years to grow its business in selling individual health insurance, known as Obamacare under the Affordable Care Act, as well as a new form of coverage for employees and employers.

In a revelation Friday At its 2024 investor day, Oscar executives outlined a plan to expand to more than 150 metropolitan statistical areas, essentially doubling the company’s footprint, the company said.

Oscar, which shook up its management ranks last year and hired former Aetna CEO Mark Bertolini, reported first-quarter profit of $177.4 million. Oscar, founded in 2012, had yet to turn a profit, but Bertolini and his new team have said that will change this year as they remain optimistic about the individual health insurance market.

Oscar, which has about 1.5 million health insurance members and is best known for selling individual Obamacare plans, wants to build on its current ACA market share in 18 states. Oscar plans to increase its market share from 13% of its footprint in 2024 to approximately 18% in 2027 through a mix of new health insurance products for individuals, employees and their employers. the company said.

Oscar wouldn’t reveal which new states or metropolitan statistical areas it might enter in the next three years, but said it has ample opportunity to grow from a current “in market opportunity” of 10 million potential customers to an “in market opportunity.” €20 million potential customers by 2027. One big market Oscar executives say they are targeting is the large US gig economy with about 58 million independent workers.

In addition, Oscar executives will stop selling small group policies after December 2024 in favor of a new plan known as an “Individual Health Reimbursement Plan” that will be available during the ACA’s open enrollment period this fall. According to the federal government’s healthcare.gov websiteSuch ICHRAs are “an alternative to offering a traditional group health plan to employees.”

“It is a dedicated, bill-based health plan that allows employers to provide defined, tax-free benefits to employees for qualified medical expenses, including monthly premiums and out-of-pocket costs such as co-pays and deductibles,” says the website healthcare.gov. ‘Employees must be enrolled in individual health insurance (such as a plan they obtain through the marketplace) to use the money.â€

Oscar executives say such ICHRAs are attractive to small and medium-sized businesses that typically have fewer than 50 employees and up to 1,000 employees. Oscar executives say some of the larger employers they work with have individual health reimbursement plans, “particularly in industries with high usage and labor costs, such as manufacturing and hospitality,” according to a company spokeswoman.

“Our model is uniquely positioned to address these trends and reorient health care around individuals and families,” said Oscar in his presentation at the investor day unveiled Friday. “The U.S. healthcare system is failing individuals and families, accelerating trends that will shape the future of the marketplace.”