Cigna, Oscar to offer plans for small businesses in Philadelphia

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Diving Brief:

  • Cigna and Oscar Health announced Monday that they will offer health insurance plans to small businesses in the Philadelphia market in expanding a partnership between the traditional payer and the insurtech.
  • The announcement comes days after Oscar Health CEO Mario Schlosser said the startup would stop seeking full-service agreements for its +Oscar information platform technology for 18 months, after meeting with difficulties implementing a partnership with Florida-based Health First Health Plans.
  • In the new Cigna+Oscar agreement for small businesses covering Bucks, Chester, Delaware, Montgomery and Philadelphia counties, the two payors said they would share risk equally under a reinsurance agreement and provide to extend the agreement over time.

Overview of the dive:

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

The co-branded plans had a strong first half, topping the 50,000 registrations mark, Louis DeStefano, Oscar’s small business manager, said in announcing the Philadelphia expansion.

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

Oscar, which was founded in 2012 and went public in March 2021, is refocusing its strategy with the aim of becoming profitable in its insurance business next year and globally by 2025. In May, the based insurer New York announced it would leave Arkansas and Colorado to market next year while remaining in 20 states as part of a reallocation of resources.

The decision to suspend new full-service agreements 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 technology platform helps organizations transition to risk-based payment models, engage with patients, and control medical spending.

Oscar’s rapid growth in the individual and small group markets has brought its total membership to over one million subscribers. The company offers individual plans both on and off the Affordable Care Act health insurance market, as well as Medicare Advantage plans.

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