In an about-face, Oscar turns to narrow-network strategy to reach enrollment goals

The health insurance company that says it wants to disrupt the industry is doing an about-face from the broad network strategy it extolled at its birth in 2012, Bloomberg reports

Oscar Health Insurance Corp. has its sights set on attaining 1 million members in the next five years, and it plans to do so largely by embracing a narrow-network plan design that will allow it to offer more competitive prices.

Plans with limited provider networks are increasingly common on the Affordable Care Act exchanges as insurers look to contain costs and consumers are often willing to pay a higher price for access.

The insurer has whittled down the list of providers it covers in the Empire State, leaving out New York-Presbyterian-affiliated hospitals and Memorial Sloan Kettering Cancer Center--where Oscar CEO Mario Schlosser previously said he'd prefer to send a patient in order to achieve better outcomes.

Still, Oscar boosted its total enrollment to 145,000 customers in 2016, compared to just 40,000 in 2015, Bloomberg notes. In its first year operating in Texas, it gained 43,000 members--helped by the fact that it offered the least expensive mid-level plan on the ACA exchange in San Antonio.

But Oscar has not been as price-competitive in California, where the insurer accounted for less than 1 percent of plan selections on the state's exchange for 2016, according to recent data from the state. Schlosser tells Bloomberg that he remains optimistic that Oscar will gain traction in California, noting that it was able to rapidly boost its enrollment in New Jersey. The insurer worked with Providence Health to build its network in California, and the two entities have collaborated on a value-based care initiative that lets them share the cost and profits associated with patient care.

In changing focus to narrow networks, Oscar is following in the footsteps of some Blue Cross Blue Shield plans as well as lesser-known startups like Melody Health Insurance that have embraced the strategy. But federal and state officials are considering new regulations aimed at ensuring narrow-network plans give patients adequate access to providers.

To learn more:
- read the Bloomberg article

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Startup health insurer embraces narrow-network plan design
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