The Company
Oscar Health is a technology-driven health insurance company focused on delivering affordable, consumer-friendly plans through the ACA (Affordable Care Act) exchanges. It primarily operates in the Individual and Small Group markets, offering plans directly to consumers and small businesses under the ACA framework.
Business Model
How Oscar Uses the ACA
Oscar’s core business is built around the ACA individual exchanges, which provide subsidized health insurance to people who don’t get coverage through an employer or government program. Oscar:
- Designs ACA-compliant plans and sells them on state and federal exchanges.
- Leverages government subsidies — over 80% of ACA enrollees receive premium assistance, which drives demand for Oscar’s plans.
- Receives risk adjustment payments from the federal government for covering sicker-than-average populations, a key revenue component for ACA insurers.
Business Model Highlights
Insurance-as-a-Platform (IaaP): Oscar white-labels its technology stack to other insurers and health systems under its “platform+” model — this generates recurring fee-based revenue, separate from insurance underwriting.
Full-Stack Technology Platform: Oscar built its own claims, member engagement, and care navigation systems from scratch — differentiating it from legacy insurers reliant on third-party software or dated systems.
Narrow Provider Networks: Oscar partners with selected hospitals and providers to keep costs low and care coordinated, allowing it to manage medical loss ratios more effectively.
Direct-to-Consumer Focus: Unlike traditional carriers who focus on employer-sponsored plans, Oscar markets directly to consumers, emphasizing user experience, mobile access, and telemedicine.
TAM / CAGR
The U.S. health insurance market, encompassing ACA marketplace plans, Medicare Advantage, and employer-sponsored insurance, is estimated to have a Total Addressable Market (TAM) of approximately $1.5 trillion. The market is expected to grow at a Compound Annual Growth Rate (CAGR) of around 5% over the next few years, driven by factors such as increased healthcare spending, technological advancements, and policy changes.
Products
| Product / Service | Description | Revenue Contribution (2024) |
|---|---|---|
| Individual & Small Group Plans | ACA-compliant health insurance plans for individuals and small businesses | ~90% |
| Cigna + Oscar | Co-branded health plans for small businesses in partnership with Cigna | ~5% |
| Medicare Advantage (Exited 2024) | Medicare Advantage plans (exited in 2024) | ~0% |
| Other Services | Includes telehealth, care navigation, and technology platform services | ~5% |
Customers
Oscar Health serves approximately 1.68 million members across 15 states, including California, Texas, Florida, and New York. Its customer base primarily consists of individuals and small businesses seeking ACA marketplace plans. The company emphasizes a digital-first approach, offering services like 24/7 telemedicine access, personalized care teams, and a user-friendly mobile app to enhance member engagement and satisfaction.
Competitors
Oscar Health operates in a competitive landscape with several major players:
- UnitedHealth Group: Offers a wide range of health insurance products, including ACA marketplace plans, Medicare Advantage, and employer-sponsored insurance.
- CVS Health (Aetna): Provides health insurance solutions, including ACA plans and Medicare Advantage, with a strong emphasis on integrated healthcare services.
- Centene Corporation: Focuses on government-sponsored healthcare programs, including Medicaid and ACA marketplace plans, serving a diverse member base.
What Makes Oscar Different?
1. Tech-First Infrastructure
Oscar was built from the ground up with a proprietary full-stack technology platform — unlike legacy insurers using fragmented systems.
- Mobile-first experience: Real-time deductible tracking, claims transparency, digital ID cards.
- +Oscar Platform: Licensable infrastructure sold to other payers/providers (e.g., Cleveland Clinic).
- Better UI/UX = smoother member onboarding, lower friction with claims and provider search.
2. Member Engagement & Navigation Tools
Oscar heavily focuses on helping members navigate the system, especially for first-time users of individual coverage:
- Each member is assigned a Care Team (nurses + reps) for personalized support.
- Smart provider search: Doctor suggestions ranked by cost, quality, and proximity.
- 24/7 virtual care with zero co-pay (before many legacy carriers offered it at scale).
3. Simplicity & Transparency
Oscar markets itself as “insurance that doesn’t suck”:
- No surprise billing (predictable costs within the network).
- Clean, consumer-grade app and website.
- Wellness incentives like step tracking → $1/day rewards.
4. Focused Markets / Narrow Networks
Rather than trying to cover everyone everywhere:
- Oscar enters selective geographies with tight control over provider networks.
- Prioritizes value-based care relationships, often partnering with local systems (e.g., Montefiore in NY, Cleveland Clinic in OH).
Why Would Someone Choose Oscar Over UnitedHealthcare?
| Feature | Oscar | UnitedHealthcare |
|---|---|---|
| Digital Experience | Best-in-class UX | Functional but enterprise-like |
| Provider Choice | Narrow networks (cost-efficient) | Broad networks (more flexibility) |
| Virtual Care | Included & proactive | Add-on or delayed rollout |
| Customer Support | Dedicated concierge + care team | Standard call center |
| Ideal For | Tech-savvy, first-time buyers, young demo | Employers, Medicare, broad populations |
But Here’s the Catch:
Oscar still faces significant scaling challenges:
- Unit economics were historically weak (high MLRs).
- Market share is small compared to giants.
- Reliance on ACA marketplaces, which can be politically vulnerable.
Oscar’s differentiation is real, but it mainly appeals to:
- Younger, urban populations
- Digital natives
- People frustrated by traditional insurers
If someone values app quality, billing transparency, and virtual care, they may pick Oscar. But if someone values provider breadth, reputation, or large employer benefits, they might prefer a giant like UnitedHealthcare.
Main Investors
| Investor | Ownership Percentage |
|---|---|
| Thrive Capital Management, LLC | 15.7% |
| The Vanguard Group, Inc. | 7.59% |
| BlackRock, Inc. | 6.48% |
| T. Rowe Price Group, Inc. | 6.44% |
| Deerfield Management Company, L.P. | 4.73% |
| JP Morgan Asset Management | 3.88% |
| Dragoneer Investment Group, LLC | 3.79% |
| General Catalyst Group Management, LLC | 0.84% |
| Mario Schlosser (Co-founder) | 1.52% |
Institutional investors collectively hold approximately 77.3% of Oscar Health’s shares, indicating strong institutional confidence in the company’s business model and growth prospects.
Founding History
Oscar Health was founded in November 2012 in New York City by Mario Schlosser, Kevin Nazemi, and Joshua Kushner (Josh Kushner is the younger brother of Jared Kushner, who is married to Ivanka Trump, Donald Trump’s daughter). The founders, leveraging their backgrounds in technology and business, aimed to revolutionize the health insurance industry by creating a consumer-centric, technology-driven platform. Oscar began offering health insurance plans in 2013, coinciding with the launch of the ACA marketplaces. The company quickly gained attention for its innovative approach, integrating telemedicine, transparent pricing, and user-friendly digital tools to enhance the member experience.
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