Oscar and Humana team up to sell small-business plans
Insurance startup Oscar Health is teaming up with national insurer Humana to sell health plans to small businesses in Nashville starting in the fall.
Since it was founded in 2012, technology-focused Oscar built its business selling plans to individual health insurance consumers. But it recently set its sight on the employer market.
The partnership with Louisville-based Humana, in which the insurers will share risk equally, marks one of Oscar's first forays into employer-sponsored insurance, where more than 150 million Americans get their coverage.
"Even as we expand our footprint to offer more individual marketplace coverage, we are moving quickly to bring the Oscar experience to the majority of Americans who get health insurance through their jobs," Mario Schlosser, Oscar CEO and co-founder, said in an announcement Wednesday. Joshua Kushner—brother of Jared and brother-in-law to Ivanka Trump—is the other co-founder.
Together, Oscar and Humana will sell commercial plans in the greater Nashville area to businesses with two to 50 employees. The partnership allows Oscar an entry point into the employer-sponsored world, which is notoriously tough for smaller insurers to break into. The venture, though, lets Oscar to take advantage of Humana's already established network of doctors and hospitals in Nashville.
Humana will be able to tap Oscar's expertise in technology and friendly consumer experience.
"This partnership is about coming together to reimagine health care coverage for small businesses and their employees, with an emphasis on simplicity and the end-to-end consumer experience," Beth Bierbower, Humana's group and specialty segment president, said in a statement.
New York-based Oscar said members will have access to Oscar's concierge teams, telemedicine and care search tools, and mobile apps that allow members to manage their care. Those with complex conditions will also benefit from Humana's coordinated care approach.
Oscar said it chose Nashville as a starting point for the partnership with Humana because of the city's growing base of small businesses and reputation as a health technology hub. If successful, the insurers could expand the partnership to additional markets across the country.
In April, Oscar began offering small business plans to employers in New York, and in 2018 will start offering plans in New Jersey and California as well, a company spokesman said.
Oscar is also expanding its footprint in the individual market at a time when most insurers are jumping ship because of financial losses and too much uncertainty about the market's future regulatory framework under the Trump administration. Last month, Oscar announced it is linking up with the Cleveland Clinic to offer individuals coverage on and off the Affordable Care Act's exchanges starting in January.
Also in June, Oscar said it will sell individual ACA plans in six state in 2018, up from three this year. It filed to expand into certain counties in Ohio, New Jersey, and Tennessee. Oscar previously sold plans in New Jersey but exited the market this year. Oscar will also expand its presence in Texas and California and will keep selling plans in New York. In 2017, Oscar covered about 105,000 members.
Oscar has struggled with financial losses despite raising millions in venture capital. It lost more than $200 million on individual plans in 2016 and $120 million in 2015. Oscar previously pulled out of exchanges in Dallas and New Jersey.
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