An upstart New York-based health plan is seeking a share of Orange County’s
Obamacare market by using sophisticated technology designed to simplify
how consumers decipher costs and seek care.
Last fall, health insurance company Oscar began selling individual policies
here and in parts of Los Angeles County through Covered California, the
state’s exchange. The open enrollment deadline for 2016 is Jan. 31.
Oscar’s plans are exclusive provider organizations, which don’t
require referrals from a primary care doctor but cover only in-network
care. In Orange County, Oscar’s contracted providers include St.
Joseph Hoag Health.
Industry observers say Oscar’s strengths include ease of use, appeal
to young adults and a solid network with large hospitals. For instance,
around-the-clock phone consultations with a doctor are free and can be
requested with the push of a button on the mobile app.
But they also note that the fledgling company, funded by venture capital,
must overcome lack of name recognition and track record as well as higher
premiums than some competitors in Southern California’s crowded market.
For an unsubsidized plan for a 35-year-old in Orange County, the least
expensive bronze plans in the market range from $200 to $252 per month,
with Oscar at $244. For the most expensive platinum plans, premiums range
from $357 to $471, with Oscar costing $401.
“Their price is an issue because a lot of Covered California people
are price-conscious,” said George Balteria, chief executive of Quote
Selection Insurance Services based in Santa Ana. “Their big push
is technology. For the Uber-riding, DoorDash crowd, they do have some
appeal and bring something new to the marketplace.”
When Oscar consumers search online for a doctor, the results include their
projected out-of-pocket cost, which can differ depending on the provider,
as well as how much experience the physician has treating patients in
their age range.
“We know that many younger people don’t really understand insurance,”
said Peter Lee, executive director of Covered California. “Oscar’s
got some tools that really address that head-on.”
Oscar CEO Mario Schlosser, 37, started the company in 2012 with two other
Harvard Business School graduates, all with tech industry backgrounds.
Oscar is named for another founder’s great-grandfather.
The company was born out of personal confusion and frustration with the
existing insurance system, Schlosser said. In his case, it was sorting
out costs when his wife was pregnant with their first child.
Oscar’s explanation of benefits has been bundled with a table of
contents for each episode of care – the care provided for a particular
medical problem– instead of piecemeal by provider, in order to eliminate confusion.
“Our EOB uses a lot of plain language, it doesn’t just give
you the strange code words. It has a much better layout and design,”
Schlosser said. “It’s almost like looking at your Facebook
timeline. It has everything in my health history.”
Oscar offers members free activity trackers they can use to earn Amazon.com
gift cards for increasing how much they walk. Oscar says that program
is most popular among customers ages 18 to 34.
“They are innovative in that they do things like provide incentives
for meeting certain wellness goals,” said Dylan Roby, a University
of Maryland School of Public Health professor and UCLA Center for Health
Policy Research researcher. “Those are fairly new to the insurance
Oscar’s marketing campaign includes lighthearted advertising in print,
television and social media. One ad reads, “We would’ve been
here sooner but we took the 405.” Another boasts, “New Yorkers
love us and they hate everything.”
But those ads may not reach parts of the untapped market for health insurance
in California, experts said.
“It could be difficult to break into that market,” Roby said.
“If you’re thinking about the Covered California population,
you have lots of people that have limited English proficiency, largely
Latinos and Asians that may be more recent immigrants.
Despite the emphasis on technology, Schlosser said help from a real person
is also essential. Even he fields calls from customers.
“Health care is fundamentally a very human industry,” he said.
“I personally explain to callers on the phone how to use the website,
how to use the features. Pretty much everyone here answers phone calls.”
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