Oscar Insurance Corp. is poised to grow and expand significantly as more investors have poured money into the tech-driven health insurance startup.
Oscar, based in New York City, said Monday that it raised an additional $145 million. Founders Fund, a San Francisco-based venture capital firm, led the most recent round of funding. Goldman Sachs, Wellington Management Co., Horizon Ventures and former investors also pitched in.
Oscar has now raised $320 million. It operates in New York and New Jersey and has 40,000 members. The new capital will “allow us to grow our staff, create new products and extend our plans to new members across the country,” Mario Schlosser, Oscar's co-founder and CEO, wrote in a blog post.
The insurer has not said where exactly it will expand, but California appears to be an immediate target. Kevin Nazemi, another co-founder of Oscar, wrote a letter in December to Covered California, the state's health insurance exchange established under the Affordable Care Act. Nazemi said Oscar is working to get a health insurance license in the state and hopes to sell plans on California's exchange in 2016.
Simplicity and consumer-friendly benefits have been the calling cards of Oscar. Oscar policyholders are able to chat virtually with doctors 24/7 through Teladoc, receive free generic drugs and choose benefit options that are similar in structure to cellphone plans. Oscar also pays members upwards of $240 a year to stay active and track their personal fitness.
“There isn't really a good navigator that helps you, as a member, navigate the system,” Schlosser said in a recent interview. “We thought about Oscar from the beginning as the entry point for our members to the healthcare system.”
Oscar has also invested more in its provider network. In December, the company partnered with technology company NaviNet to better exchange clinical data with physicians in real time and at the point of care.
Younger, tech-savvy people have flocked to Oscar. Roughly 9 out of 10 members have an online account, and the average age of an Oscar member is about 40 years old, Schlosser said.
But like other health insurance companies, Oscar has faced patient complaints of surprise bills and general dissatisfaction, which the company said it is working to improve.