The insurer plans to cut commissions by more than half. Although Oscar planned to pay brokers $14 per contract each month for individuals and up to $26 for families, policies received after Nov. 6 will only make $6 per contract each month, regardless of how many individuals are in the plan.
The slash in commissions comes as Oscar revealed it had a $41.5 million loss during the first three quarters of 2015, despite having doubled its revenue to $83.8 million and its New York membership to 34,000. Fees for hospital benefits and drugs tripled in the same time period to $117.2 million.
The insurer reported losses of $27.5 million in 2014.
The rise in membership has partially contributed to the shutdown of the health insurance co-op Health Republic of New York. According to Jason Samel, owner of Long Island-based JayMar Insurance Agency, said approximately 80 percent of individuals he assisted enrolled through Oscar, including former HealthRepublic members.
Oscar attributes the decrease in commissions to the unstable marketplace. “We recognize this will add to your challenges at an already difficult time,” said Oscar’s letter to brokers. “Given the unprecedented circumstances in the market, this change is necessary to ensure we are able to grow our business in a controlled manner and can continue to offer a great experience to all of our members.”
More articles on payer issues:
Implications of proposed health insurer mergers: 6 things to know
UnitedHealth CEO: Participating in ACA exchanges was a ‘bad idea’
N.J. insurance chief: Stopping narrow network plans would ‘trigger chaos’
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