JPM24: Oscar Health eyes 2024 profitability and ICHRA

Ahead of its fourth quarter earnings next month, Oscar Health CEO Mark Bertolini expects 2024 to be a profitable year.

The insurtech recorded a $65.7 million net loss last quarter, but he expects the insurtech will reach 1.3 million members once open enrollment concludes this year, marking a 31% increase year-over-year.

Its long-term strategy, to be unveiled at investor day later this year, will focus heavily on individual coverage health reimbursement arrangements (ICHRA) in the next few years, with an intent to throw its hat into the Medicare Advantage ring beyond that.

"Our first market opportunity will be in ICHRA," he said. "We believe ICHRA's time has come. We believe we have a different approach than most other people in that marketplace that will give us an advantage in growth in 2024 and 2025."

The company's first goal is to hit 5% or better operating margin this year and then utilize ICHRA, a market that includes 70 million middle market and small group insured employers that Oscar Health believes could benefit from its offerings. Bertollini said ICHRA is a hedge for employers who are trying to rein in costs from inflation, presenting a growth opportunity for the company to show employers they can reduce their costs. He noted Oscar Health obtained 240 members in this year's enrollment out of ICHRA plans without offering a product.

Bertolini declined to give any projections on how many members the company could add through ICHRA offerings.

He also said that he thinks Oscar Health is well-positioned down the line to handle Medicare Advantage business.

"I sort of see Oscar Health as a pirate ship with cannons amid Spanish galleons filled with gold," he explained. "They're called big insurance companies who are not going to want to give up middle market and small group insured or Medicare Advantage."

He said he sees Oscar Health approaching providers who are dismayed and dropping Medicare Advantage plans by signing patients up to +Oscar, enabling them to provide private-label opportunities instead of selling through brokers. Oscar Health would set up quota share with providers as part of an agreement.

"Ultimately, we will get into the Medicare Advantage business, but that's a few years out, using our +Oscar Health platform with health systems in the market, by enabling them to provide private-label opportunities ... versus having to sell through brokers to the market," said Bertolini.