Cigna, Oscar to provide small business plans in Philadelphia

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Dive Brief:

• Cigna and Oscar Health said Monday they will expand their partnership between the traditional payer and insurer to offer health insurance plans to small businesses in the Philadelphia market.
• The announcement comes after Oscar Health CEO Mario Schlosser said it will stop fulfilling full-service agreements for +Oscar’s information platform technology for 18 months after problems implementing a partnership with Florida-based Health First Health Plan.
• In the new Cigna + Oscar small business contract covering Bucks, Chester, Delaware, Montgomery and Philadelphia counties, the two payers will share equal risk in the reinsurance agreement and said they plan to expand the arrangement over time.

Dive Insight:

Cigna began partnering with Oscar in 2020 to sell business health plans to small employers at a time when more businesses are looking to offer comprehensive benefits as a way to attract and retain talent. Small business plans are now on the market in seven states.

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

In the Philadelphia market, Cigna + Oscar’s plan for businesses with fewer than 50 employees includes low-cost prescription drug coverage, behavioral health support and Cigna’s networks of doctors, specialists and hospitals, the companies said. Nationwide provider access is available through Cigna’s Open Access Plus network without the need for a referral. The products will be available January 1, pending regulatory approval.

In the year Oscar, which was founded in 2012 and will go public in March 2021, is reshaping its strategy with the aim of turning its insurance business profitable next year and overall by 2025. The Colorado market will remain part of a wealth transfer in 20 states next year.

The decision to pause new full-service agreements for +Oscar’s information technology platform will allow more time to support the Health First partnership, company officials said last week. The technology platform helps organizations move to risk-based payment models, connect with patients and control medical costs.

Oscar’s rapid growth in the individual and group markets has brought its total membership to over 1 million subscribers. The company offers individual plans on and off the Affordable Care Act health insurance marketplace as well as Medicare Advantage plans.