Health insurance startup Oscar Health will team up with Cigna to offer plans for small businesses. The plans will be branded as Cigna + Oscar, with both companies sharing risk equally. The new plans will launch in a handful of unannounced markets this year, and both companies expect to expand the partnership over time.
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“Together, we are giving small business owners an affordable, simple-to-use option that makes it easier for their employees to get appropriate care quickly and stay healthy,” Oscar Chief Policy and Strategy Officer Joel Klein said in a news release. “Cigna + Oscar will give these business owners and their employees consumer-centric health care coverage and physician networks that provide personalized care.”
New York-based Oscar Health was founded in 2012, and built its reputation as a tech-savvy insurance carrier. It first started offering individual market plans through the ACA exchanges, and has since expanded to offer small group and Medicare Advantage plans. The company has raised a total of $1.3 billion to date, with Alphabet leading a $375 million funding round in 2018 that Oscar Health used to expand into the competitive Medicare Advantage market.
Last August, Oscar embarked on a plan to expand to six new states and expand its presence in existing states. The company brought in more than $1 billion in premium revenues in 2018 and had roughly 257,000 members going into 2019, but faced reports of sluggish growth as it continued to push into new markets.
The company has since grown to 400,000 members in 2020, and expects to bring in roughly $2 billion in revenue by the end of the year, according to TechCrunch.
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Cigna isn’t one of the largest providers of small group plans, which apply to businesses with up to 100 employees, but the companies hope the partnership will give them both a leg-up in this space. Oscar doesn’t provide vision or dental insurance, but the partnership with Cigna could help remedy this, not to mention access to Cigna’s Express Scripts pharmacy benefit manager.
“Small businesses are the backbone of the American economy and through this partnership, we can take a disciplined approach to offering differentiated health care solutions that help small businesses save money, expand network and product choice and keep employees healthy,” Cigna Vice President of Product Solutions Julie McCarter said in a news release.
The plans will include medical, behavioral health and pharmacy services. They will also include 24/7 access to telemedicine at no cost, along with tools to make it easy to book appointments, review providers and check prescriptions.
The new plans are still subject to regulatory approval.
Photo credit: Nuthawut Somsuk, Getty Images
