Oscar says it uses technology to lower cost: More than 60 percent of member interactions with health systems are virtual.
Alphabet, the parent company of Google, is investing $375 million in Oscar Health, the technology-driven health insurer cofounded by Mario Schlosser and Joshua Kushner, brother of White House advisor Jared Kushner.
The funds will help move the New York City-based insurer into its next phase of expansion, entering the Medicare Advantage market.
“Today, we are announcing Alphabet’s plans to invest $375 million into Oscar Health,” said Mario Schlosser, co-founder and CEO of Oscar Health. “Oscar will accelerate the pursuit of its mission: to make our healthcare system work for consumers. We will continue to build a member experience that lowers costs and improves care, and to bring Oscar to more people — deepening our expansion into the individual and small business markets while entering a new business segment, Medicare Advantage, in 2020.”
Schlosser also announced the addition of Salar Kamangar to Oscar’s board. Kamangar is a senior executive at Google and former CEO of YouTube.
This is the second big investment for Oscar Health in less than a year. In March, Oscar raised $165 million from Alphabet, Founders Fund and other sources.
Numerous insurers have jumped into the MA market, finding there a growing population of aging baby boomers who are attracted to the plan’s additional benefits, such as dental and vision. About a third of Medicare beneficiaries have Medicare Advantage as their plan.
MA has seen strong earnings for insurers. UnitedHealth Group, Humana, Aetna, Cigna, Anthem, Centene and numerous Blue Cross Blue Shield plans are in the MA market, contracting with the federal government to offer the private plans.
Oscar is also in the Affordable Care Act market.
However, the insurer has struggled to turn a profit, according to Politico.
Schlosser and Kushner founded the company in 2012, saying the only way to fix the broken healthcare system is to empower the consumer.
Oscar uses data science and technology to do lower costs.
Sixty-three percent of member interactions with the healthcare system are virtual, the company said. More than 40 percent manage their health through the Oscar website and mobile apps. Forty-three percent of members’ first visits to the doctor are routed through Oscar.
In June, Oscar announced it had added three states, Florida, Arizona and Michigan, to the existing six where it has a footprint: California, Ohio, New York, New Jersey, Texas and Tennessee.
It added three additional large metro areas in Ohio, Tennessee and Texas for a total of 14 markets, 260,000 members and $1 billion in premiums.