Mark Bertolini, CEO of Oscar Health, has outlined the company’s plans for future growth and profitability. He believes that tapping into the employer market will be crucial in achieving these goals. Bertolini wants to target the 71 million lives that are part of small group and middle market employers, where he believes most employees are over-insured. By providing a level premium and offering a more flexible benefit plan, Oscar Health aims to create a whole new market.
This strategy is not entirely new. When the Affordable Care Act exchanges were launched a decade ago, it was predicted that employers would shift from group coverage to individual coverage health reimbursement arrangements (ICHRAs), giving employees the freedom to purchase their own ACA plans. However, this shift never materialized because insurers did not focus on cost reduction for employers or their workers.
Bertolini plans to change this by introducing new plan designs and underwriting the group. The goal is to ensure that employees are enrolled in the right plans that suit their needs. By expanding into the employer market, Oscar Health hopes to increase its membership from 1.5 million to approximately 4 million by 2027.
To achieve these ambitious targets, Bertolini is leveraging his experience as the former CEO of Aetna. He has deep knowledge of how large insurers and pharmacy benefit managers (PBMs) operate. Last year, he successfully negotiated more favorable terms on Oscar Health’s PBM contract with CVS Health’s Caremark division, which has helped the company control medical costs on its plans.
Looking ahead, Bertolini is closely watching how Blue Shield of California implements its potentially disruptive PBM model. Blue Shield has contracted with a smaller PBM firm and will be using Mark Cuban’s Cost Plus Drugs and Amazon Pharmacy as its preferred pharmacy networks starting in 2025. Bertolini believes that the current PBM model is outdated and needs to be more transparent and customer-centric. The three major U.S. PBMs, CVS’s Caremark, Cigna’s Express Scripts, and UnitedHealth Group’s Optum Rx, have all faced regulatory scrutiny and have introduced more transparent pricing models in response.
In conclusion, Mark Bertolini’s strategic vision for Oscar Health involves tapping into the employer market and focusing on cost reduction for employers and their workers. By creating plan designs and underwriting the group, Oscar Health aims to provide a more flexible benefit plan that meets the needs of employees. Additionally, Bertolini recognizes the need for reform in the PBM model and believes that transparency and passing on savings to customers are crucial for the industry’s future success. With his experience and expertise, Bertolini is positioning Oscar Health for growth and profitability in the coming years.
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