Oscar Insurance Corp., the startup that has touted itself as a consumer- and technology-focused new healthcare approach, has had to turn to the same strategy as many traditional insurers by reducing Affordable Care Act insurance-marketplace participation for 2017.
It will stop offering plans in the Dallas–Fort Worth, Texas market and in New Jersey starting Jan. 1. It will continue to sell plans in New York; San Antonio, Texas; Los Angeles and Orange County, Calif.; and it will expand to San Francisco.
The company blamed the ACA’s individual market, saying that it “isn’t working as intended and there are weaknesses in the way it’s been set up,” CEO Mario Schlosser told Bloomberg.
HealthcareDive reported that the announcement is part of the company’s efforts to “re-strategize after suffering continued marketplace losses, including its recently announced losses from the first half of 2017 which included $52.2 million in New York state, $17.9 million in Texas and $12.9 million in California.”
The news service added: “Oscar has also followed industry trends in narrowing its networks and in seeking a major rate increase in New York of 26.8 percent, which was reduced by regulators to 11.5 percent.”
Mr. Schlosser said Oscar is leaving New Jersey because it didn’t have a narrow network there to contain costs, and Dallas-Fort Worth because its market there has been too unpredictable.
“One major difference currently between Oscar and its mainstream competitors such as UnitedHealth, Humana, and Aetna, which are also pulling back for 2017, is that it doesn’t have other business beyond its individual policies to fall back on — but it plans to change that by offering small group insurance across most of its 2017 markets,” Healthcare Dive reported.
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