Skip to main content
Sister Publication Links
  • ESG: THE IMPLEMENTATION IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Digital Health
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Unwell in America
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Insurance
November 08, 2022 07:51 PM

Oscar Health effectively ends Medicare Advantage business

Nona Tepper
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    puzzle and money
    Modern Healthcare Illustration / Getty Images

    Oscar Health has all but abandoned Medicare Advantage after attracting few policyholders during its four years in the market, CEO Mario Schlosser said during the company’s third-quarter earnings call with investors Tuesday. 

    Oscar Health offered Medicare Advantage plans in New York and Texas this year but has pulled out of those states for next year. The company's lone remaining Medicare Advantage product is a plan sold in Broward County, Florida, that is jointly marketed with Trinity Health's Holy Cross Health in Fort Lauderdale and Memorial Healthcare System in Hollywood.

    The insurtech did not immediately respond to questions about whether it would sell this plan in 2023, but the policy is listed on Medicare.gov as available.

    The insurtech offered its first Medicare Advantage plans in 2019 after receiving a $375 million investment from Alphabet. Oscar Health inked the deal with Holy Cross Health and Memorial Healthcare the following year. “We’re confident that our approach will ensure long-term, sustainable growth in Medicare Advantage—unlocking a new opportunity to bring consumers a health insurer that puts them first,” Schlosser wrote in 2018.

    Oscar Health counted 4,577 Medicare Advantage members during the third quarter of this year, up 17.9% from this time last year, but representing a tiny fraction of its more than 1 million policyholders.

    “We’re eyeing an increased focus on [Affordable Care Act] plans and family plans,” Schlosser said. “We hope to eventually go back to doing more in the [Medicare Advantage] market, and the way for us being in this market is to partner. That is the future of our +Oscar business.” 

    Oscare Health reiterated its plan to pause full integrations of its +Oscar technology platform for the next 18 months as it seeks to achieve profitability in its insurance arm in 2023 and across the entire company in 2024. Some provider groups are using elements of the software to navigate risk-based relationships, Schlosser said. The insurtech is also using the platform to manage care for its members, he said. 

    “We’re going to focus, until 2024, on not rolling out anymore bigger +Oscar deals,” Schlosser said. “We’ve got to solve for how to sell in a more effective and efficient way and implement third parties in a more effective and efficient way.” 

    Additional expenses related to deploying its existing +Oscar technology contracts contributed to a net loss of $193.5 million during the third quarter, which is an improvement of $18 million compared with the year-ago quarter. In August, the nonprofit integrated system Health First announced it would end its technology agreement with Oscar Health. The Rockledge, Florida-based company was the first customer to completely and publicly buy into the +Oscar platform. 

    Higher-than-expected marketing costs caught the insurtech off-guard, Chief Financial Officer Scott Blackley said during the call. 

    Ninety-five percent of Oscar Health’s more than 1 million members come from the individual and small group markets. The health insurance exchange special enrollment periods President Joe Biden implemented as part of COVID-19 relief caused Oscar Health’s exchange membership to balloon 74.7%. That led to a sicker, costlier risk pool than the insurer anticipated. Oscar Health will exit the Arkansas and Colorado exchange markets next year. 

    The company had planned to stop paying marketers to promote its products after the second quarter. But the Centers for Medicare and Medicaid Services updated its guidance to prohibit insurers from changing broker compensation mid-year, Blackley said.

    “That was not implicit in our initial guidance and was a headwind to our administrative expense ratio, as well as drove up our adjusted EBITDA loss,” he said, referring to the company’s adjusted loss on earnings before interest, taxes and depreciation. 

    Next year, Oscar Health aims to keep its membership steady and has priced its products for margin. But competitors exiting the exchanges make it hard to forecast what enrollment growth will look like next year, Schlosser said. Bright Health Group ended its exchange coverage for 2023 and Friday Health Plans dramatically reduced its footprint, for example.

    Oscar Health holds $3.9 billion in cash and investments and has enough money to fund operations through 2024, Blackley said. A Cowen analysis from August concluded that Oscar Health needs to raise $400 million to get to 2024.

    “We built in pricing to improve margin this year so, while we have a competitive position and we’re certainly across a variety of markets, we’re slightly less competitive than we’ve been in the past,” Blackley said. 

    Related Articles
    Insurtechs shift strategy from 'growth at all costs' to profitability
    Bright Health to exit 9 more states to curb financial losses
    Oscar Health loses big customer
    Alignment Healthcare expanding as insurtech rivals shrink their footprint
    Insurtech CEOs paid much more than legacy insurer leaders
    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Clawbacks
    Insurance companies ramp up efforts to claw back money from providers
    Feds take aim at prior authorization
    Feds take aim at prior authorization
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Digital Health
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Unwell in America
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing