Health insurer Oscar, which is looking to disrupt the industry using data, plans to raise 2017 premiums for its New York plans while scaling back provider networks, according to a blog post by CEO Mario Schlosser.
The move indicates that Oscar must confront the same market forces as the companies it is trying to challenge--the “big five” insurers, whose combined market cap is $268.8 billion, according to Schlosser.
The changes to the insurer's provider network in New York, scheduled for 2017, amount to an almost 50 percent reduction of in-network physicians.
Limiting choice of providers is not a new tactic for insurers to control costs, as FierceHealthPayer has reported, particularly in the wake of the Affordable Care Act.
Schlosser, who oversaw $92.4 million of losses in the New York market in 2015, is confident the new network fits his long-term vision, calling the move "good" and "necessary." The company also announced a 16 percent premium increase for plans in New York.
In selecting its provider network for 2017, Schlosser writes that Oscar used three criteria: Comprehensive care, willingness to collaborate with other providers to create a “seamless” virtual care experience, and value.
Schlosser says the decision is not solely driven by an eye on the company’s bottom line, as some critics suggest. That story, “while easy to write,” does not consider the potential of the tools Oscar provides the 61,00 individuals insured in New York, Schlosser argues.
He also compares Oscar's 16 percent premium increase with its competitors in the New York market, noting that UnitedHealth’s premiums will rise 52 percent and Empire Blue Cross Blue Shield has 25 percent rate hike scheduled. Oscar's 16 percent increase also is lower than its earlier request of 30 percent.
- read the blog post