Oscar Health is pressing pause on new deals for its technology platform for more than a year as it manages issues in integrating with Health First Health Plans, an early adopter of the tech stack, executives told investors.
The insurtech hosted its second-quarter earnings call late last week, where CEO Mario Schlosser said the company plans to hold off on additional full-service deals for its +Oscar platform for the next 18 months. Oscar formally launched its tech platform business in April 2021.
The +Oscar tech stack aims to simplify administrative tasks and boost the member experience.
The partnership with Health First was set to go live at the start of this year but is facing significant challenges due to the complexity of integration, Schlosser said. Putting a pin in new deals allows Oscar to address issues with implementation without overextending its capabilities.
"We remain committed to the +Oscar business," Schlosser said.
Chief Financial Officer Scott Blackley said on the call that Oscar is still negotiating potential deals in the space even as it focuses on addressing the implementation challenges, as there is a demand for such services.
The company is still pushing toward profitability and is focused on turning a profit in its insurance business by next year and overall by 2025. Oscar posted $1 billion in revenue for the second quarter and a net loss of $112.2 million, up from a $73.3 million loss in the prior year quarter.
In addition, Oscar announced that it will expand the reach of its small business plans, which are co-branded with Cigna, into the Philadelphia metropolitan area beginning Jan. 1, pending regulatory approval. The coverage will be offered in five regions: Bucks, Chester, Delaware, Montgomery and Philadelphia counties.
The plans target small businesses with between one and 50 employees. The Cigna + Oscar plans just crossed the 50,000 member milestone, the company said.
“In this dynamic environment, small businesses need health plans that are affordable, predictable, and simple. With this expansion, Cigna + Oscar health plans are now able to help small businesses in Philadelphia provide their employees with access to quality care at a more affordable cost," said Bruce Grimm, senior vice president and commercial segment lead at Cigna, in a statement.