Managers of Oscar Health Inc. have tried to take an innovative approach to designing and marketing health insurance — and they’re telling potential investors that one key to their success will be to attract insurance brokers.
The New York-based company last week filed a registration statement that could lead to the company selling shares of the company’s stock to the public, through an initial public offering of common stock, or IPO.
Oscar warned in the registration statement that one of the risk factors it faces is the possibility that it might have trouble with brokers.
Oscar could have trouble growing its member base if “insurance brokers that we rely on to build our member base are unable to market our insurance products effectively, or if we fail to attract to brokers to sell our insurance products, or lose important broker relationships to our competitors or otherwise,” the company said.
In another part of the registration statement, Oscar said, “The commissions we offer to brokers could also increase significantly as we compete to attract new members.”
Oscar was founded in 2012 by Joshua Kushner and Mario Schlosser. Kushner is the brother of Jared Kushner, the son-in-law of former President Donald Trump.
The founders started by focusing on the market for individual major medical insurance. Since then, the company has branched out to add small-group health coverage and Medicare Advantage plans.
Oscar offers small group coverage through an alliance with Cigna Corp., and it offers the Medicare Advantage plans through alliances with hospital-led health care systems.
The company now has about 1,800 employees.
IT now has 529,000 enrollees in 18 states. It ended 2020 providing individual and small group coverage for about 400,000 people, and Medicare Advantage plan coverage for 1,924 people.
About three-quarters of the company’s enrollees are in California, Florida and Texas.
Oscar has a care team provide and coordinate care for each enrollee, and it says enrollee interactions with the care team help increase enrollee retention.