10 things to know about Oscar Health: A view of the company 6 years after its founding

Oscar Health, a New York City-based health insurance startup, is branded as "a new kind of insurance company." Founded in 2012, the web and technology-focused company set out to simplify coverage and make the healthcare system easier for patients to navigate. Six years later, Oscar has made significant investments internally and expanded externally from its original presence in New York to nine states and 14 markets planned for 2019.

Here are 10 things to know about the health insurance company.

1. Mario Schlosser, the company's CEO, founded Oscar with Kevin Nazemi and Josh Kushner in 2012. They decided to start the company after Mr. Schlosser saw how complicated it was to find care and the right physician during his wife's first pregnancy.

Mr. Schlosser told Bloomberg, "it wasn't really my first thought to think about the health insurance company when it came to how to navigate the system in front of me. That's not what you think of first — you go and ask your friends, you Google it — you don't think of necessarily gauging your insurance company and that felt like a big gap in the way the system works. The experience then was, what would this cost me, which pediatrician would I be able to find to take care of my kid once he's born. Those are the things I couldn't really answer." After this experience, the idea came to design a company that focused on the consumer and made it easier for them to navigate the system.

2. Since its founding, Oscar Health has raised more than $800 million from venture capitalists, increasing its valuation to $3.2 billion, up from $1.5 billion in 2015 and $2.7 billion in 2016. The jump is partially attributable to the latest $165 million funding round from Google's parent company Alphabet, Founders Fund and others, reports CNBC.

3. Oscar continues to grow enrollment and was named among CNBC's top 50 'disruptors' for 2018. After the most recent open enrollment, Oscar increased its overall membership by 250 percent, up from a high of 100,000 members in 2017. The company projects it will reach 260,000 members in 2018, according to CNBC.

4. The company began by providing coverage solely to residents in New York but by 2017 had expanded to markets in San Antonio, Los Angeles and Orange County in California, and San Francisco. Earlier this year, the company added Nashville, Tenn., Cleveland and New Jersey. And in June, Oscar filed plans to offer individual marketplace coverage in three new markets in Florida, Arizona and Michigan next year. The company also plans to expand to three new markets in large metro areas in Ohio, Tennessee and Texas, in 2019.

5. Oscar's founders initially designed the company to improve the consumer health insurance experience. Company spokesperson Emma Riccardi said they had "a very clear mission to make the healthcare system and the way that consumers approach the healthcare system more simple, easier and in a lot of ways more affordable."

6. Ms. Riccardi said the founders' initial message is shown today in that the company offers direct scheduling in some states, meaning customers may schedule appointments through the Oscar app. Oscar also joined forces with Cleveland Clinic on a co-branded health plan in June 2017 to offer individual coverage to northeast Ohio residents. The co-branded plan has already enrolled 11,000 members for 2018. Oscar also teamed up with Humana to offer small employer health plans in Nashville last year.

7. In terms of technology and customer service, Oscar has integrated free, 24/7 telemedicine in most plans, and offers a personalized concierge team for members. The concierge team is available to answer questions about claims, make appointments or help the patient find the best provider for their needs. Additionally, the company has integrated a step-tracking feature in its app that allows members to sync the feature with their mobile device. If the member hits their step goal for the day, they can receive up to $1 in Amazon awards, with the possibility of up to $240 for the year in step tracking rewards.

8. While Oscar's offerings and perks may attract a large number of members, it still remains to be seen whether it can garner enough consumer trust to surpass larger insurers like UnitedHealth and Aetna, reports CNBC. The news TV channel notes Oscar believes it can do so with a continued focus on customer service and technology.

9. Still, the company has seen financial struggles. The company lost $115 million in 2015, and it left ACA markets in New Jersey and decreased its presence in Dallas the following year — though Oscar has since returned to New Jersey. In the first half of fiscal year 2017, Oscar reported a $57.6 million loss, although it generated an underwriting profit in that year overall. It expects to reach $1 billion in gross premium revenue in 2018 and CFO Brian West confirmed to CNBC that profitability is "around the corner."

10. Moving forward, Oscar will need to prove its valuation, health insurance experts told CNBC. Ari Gottlieb, a consultant specialized in health insurance, told the news TV channel: "While startup insurers have the potential to show massive revenue growth, underlying profitability for companies that actually have viable businesses is limited through market forces and regulatory requirements."

The company's "valuation per member is six to eight times that of established, publicly traded health plans that have actually achieved consistent profitability."

Mr. Schlosser told CNBC Oscar has earned the valuation with its "everything [built] in house" approach. This approach means technology for processing claims and managing enrollees is built internally.

Morgan Haefner contributed to this report. 


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