Oscar Health plans to extend its geographic reach and launch new products next year to counter shrinking membership, CEO Mark Bertolini said Tuesday.
Enrollment fell 6.4% to 970,543 during the second quarter, largely driven by declines in the insurtech's health insurance exchange and Medicare Advantage businesses, although enrollment in Cigna+Oscar small business plans grew 48.7% to 68,400, the company reported Tuesday. The company also reported a medical loss ratio of 79.9%, an improvement from the 82.2% reported during the same period last year. Oscar Health narrowed its net loss 86.2% to $15.4 million as revenue grew 49.6% to $1.5 billion during the second quarter.
Oscar Health aims to grow premium revenue 20% next year by expanding its geographic footprint in more than half of the 20 states in which it sells marketplace coverage, Bertolini said. The insurer will target rural consumers in particular and offer plans catering to people with specific health needs, such as respiratory disease patients. Oscar Health aims to achieve profitability in its insurance operation this year and overall profitability in 2024, he said.
“We’re looking to diversify our revenue across our markets, so we have priced appropriately and with margin in mind,” Bertolini said during a call with investment analysts.
Oscar Health will launch a product called Breathe Easy in some markets next year, which is designed for patients with respiratory conditions such as chronic obstructive pulmonary disease, Bertolini said. Offerings such as this could provide the insurer with an entry point into health reimbursement arrangements for small-to-midsize employers seeking cost savings for employees with chronic conditions, he said.
“With benefit designs focused on comorbidities and stabilizing employers’ populations, we see an opportunity to move more toward defined contribution plans,” Bertolini said.
The insurer also seeks to partner with health systems to sell Medicare Advantage plans, Bertolini said. Oscar Health essentially ended its Medicare Advantage business and paused exchange sign-ups in Florida—its largest market—last year to cut costs. The company is poised to return to Florida, however.
The Florida Office of Insurance Regulation has granted Oscar Health permission to begin accepting new exchange members, according to a consent order filed Saturday. The state placed a number of conditions on the company, including barring it from paying shareholder dividends for at least two years after it achieves profitability. Oscar Health also may not withdraw capital from its Florida subsidiary until the company has earned profits for two consecutive years and must provide weekly updates on membership changes during open enrollment for two years.
Bertolini sought to temper expectations for Oscar Health's business in the Sunshine State. “Florida will grow, but it won’t grow at the kind of rates that supported us in ‘22,” he said.
Chief Financial Officer Sid Sankaran will depart the company on Sunday and Chief Transformation Officer Scott Blackley, who formerly served as chief financial officer, will assume his duties, Bertolini said.