Small, startup insurers hope to compete on exchanges

Big-name insurers definitely have the upper hand when it comes to succeeding on the health insurance exchanges, given their large financial reserves and membership as well as ample underwriting experience to better predict plan pricing and design needs. But that's not stopping smaller, startup insurance companies with lofty goals for selling plans on the marketplaces.

One such new insurer is Oscar Health Insurance, which was founded by Internet entrepreneurs and $40 million of venture capital backing. Its plans provide unique offerings like simple shopping tools, free unlimited telemedicine options with a doctor and access to providers on a condition-by-condition basis, reported AIS Health.

These startup insurers are similar to consumer oriented and operated plans (CO-OPs), which hope to bring a new paradigm to the insurance industry and also are selling plans on exchanges, FierceHealthPayer previously reported.

Oscar is selling individual plans in multiple counties throughout New York, and the company is hoping its low prices will help draw consumers to its plans. "In the nine counties [where they are active] we are some of the two or three lowest-cost options in terms of rates," Oscar co-CEO Mario Schlosser said.

But Oscar also has goals beyond the New York exchange, hoping to offer policies off the marketplace in the future. Given these widespread objectives, Oscar recruited experienced insurance executives.

"Very early on we realized the tremendous undertaking it is to build a health insurance company ... so we teamed up with a number of very experienced executives from the health insurance world: the former chief actuary of Emblem [Health], the former chief medical officer of Emblem, executives from MVP [Health Care]," he added.

It's unclear, however, whether startup insurers can overcome some major obstacles. For example, provider consolidation threatens new insurers' ability to create their own network of doctors, and regulatory minimums often require a large amount of upfront capital.

To learn more:
- read the AIS Health article

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