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- Cigna and Oscar Health said Monday they will offer health insurance plans to small businesses in the Philadelphia market in an expansion of a partnership between the traditional payer and the insurtech.
- The announcement comes days after Oscar Health CEO Mario Schlosser said the startup would stop pursuing full-service deals for its Oscar + information platform technology for 18 months after it ran into difficulties implementing a partnership with Florida-based Plan Health First Health.
- In the new Cigna + Oscar small business deal covering Bucks, Chester, Delaware, Montgomery and Philadelphia counties, the two payers said they will share risk equally under a reinsurance agreement and plan to expand the agreement over time .
Cigna began partnering with Oscar in 2020 to sell commercial health plans to small employers, anticipating growth in the small group market as more businesses look to offer comprehensive benefits as a way to attract and retain talent. Small business plans are now available in markets in seven states.
The co-branded plans had a strong first half of the year, surpassing the 50,000 member enrollment mark, Louis DeStefano, Oscar’s head of small business, said in announcing the Philadelphia expansion.
In the Philadelphia market, Cigna + Oscar plans for businesses with fewer than 50 employees will include low-cost prescription drug coverage, behavioral health support and Cigna’s networks of doctors, specialists and hospitals, the companies said. Access to providers nationwide is available without the need for referrals through the Cigna Open Access Plus network. The products will become available on January 1, pending regulatory approval.
Oscar, which was founded in 2012 and went public in March 2021, is refocusing its strategy in an effort to become profitable in its insurance operations next year and overall by 2025. In May, the insurer with The New York-based company said it would exit the Arkansas and Colorado markets next year while remaining in 20 states as part of a reallocation of resources.
The decision to end new full-service agreements for the +Oscar information technology platform will allow more time to support the integration of the Health First partnership, company executives said last week. The technology platform helps organizations shift to risk-based payment models, engage with patients and control medical costs.
Oscar’s rapid growth in the individual and small group markets has increased its total membership to more than 1 million registrants. The company offers individual plans both inside and outside the Affordable Care Act health insurance marketplace, as well as Medicare Advantage plans.