Cigna, Oscar to offer small business plans in Philadelphia

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Dive Brief:

  • Cigna and Oscar Health said Monday they will offer health insurance plans to small businesses in the Philadelphia market in an expansion of a partnership between the traditional payer and the insurtech.
  • The announcement comes days after Oscar Health CEO Mario Schlosser said the startup would stop pursuing full-service deals for its +Oscar information platform technology for 18 months, after running into difficulties implementing a partnership with Florida-based Health First Health Plans.
  • In the new Cigna + Oscar small business deal covering Bucks, Chester, Delaware, Montgomery and Philadelphia counties, the two payers said they will share risk equally under a reinsurance agreement and plan to expand the arrangement over time.

Dive Insight:

Cigna began collaborating with Oscar in 2020 to sell commercial health plans to small employers, anticipating growth in the small group market as more businesses look to offer comprehensive benefits as a way to attract and retain talent. The small business plans are now available in markets across seven states.

The co-branded plans had a strong first half of the year, surpassing the 50,000-member mark in enrollment, Louis DeStefano, Oscar’s head of small business, said in announcing the Philadelphia expansion.

In the Philadelphia market, the Cigna + Oscar plans for businesses with fewer than 50 employees will include low-cost prescription drug coverage, behavioral health support and Cigna’s networks of doctors, specialists and hospitals, the companies said. Access to providers nationwide is available without the need for referrals, through the Cigna Open Access Plus network. The products will become available Jan. 1, pending regulatory approval.

Oscar, which was founded in 2012 and went public in March 2021, is refocusing its strategy in a bid to become profitable in its insurance operations next year and overall by 2025. In May, the New York-based insurer said it would exit the Arkansas and Colorado markets next year while remaining in 20 states as part of a reallocation of resources.

The decision to pause new full-service deals for the +Oscar information technology platform will allow more time to support the integration of the Health First partnership, company executives said last week. The tech platform helps organizations transition to risk-based payment models, engage with patients and control medical spending.

Oscar’s fast growth in the individual and small group markets has boosted its overall membership to more than 1 million enrollees. The company offers individual plans both on and off the Affordable Care Act health insurance marketplace, as well as Medicare Advantage plans.

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