10 things to know about Oscar Health Insurance: Will it be the Uber of health plans?

Oscar Health Insurance, a young New York-based start-up valued at $1.5 billion, is lauded as a disrupter among its more traditional contemporaries. With its quirky branding and emphasis on simplicity, it has been coined the "hipster" health insurance company poised to "make health insurance suck less."

Here are 10 things to know about the health insurance company.

1. Josh Kushner, a venture investor at Thrive Capital, co-founded Oscar Health Insurance with Kevin Nazemi and Mario Schlosser in July 2013. Mr. Schlosser serves as Oscar's CEO. The insurance company originally provided coverage to individuals in New York, and later added nine upstate counties of New Jersey to its service line. Oscar has announced plans to expand into Texas and California, but "conversations with regulators are ongoing," Mr. Schlosser told Fortune.

2. In April, Oscar raised a large round of funding that moved the company's value to $1.5 billion. The funding, which brought in $145 million in new capital, was led by Founders Fund, as well as Horizon Ventures, Wellington Management Company and Goldman Sachs, according to Fortune. Oscar was previously backed by $150 million in funding. While $1.5 billion is pocket change compared to UnitedHealth Group's $114 billion market cap or Aetna's $37.75 billion value, the new insurance company's rapid success in a short amount of time suggests significant room for growth.

3. Oscar is among the largest startups in the health insurance industry, according to Fortune. The insurer tripled enrollment this year from 17,000 to 40,000 members, which amounts to roughly $200 million in annual premiums. Though still in its infancy, Oscar calculates it represents approximately 12 to 15 percent of the marketplace for individual health insurance in New York, according to Fortune. The company has also grown its workforce from 90 employees in 2014 to 185 in April 2015.

4. Oscar's founders set out to apply a design-centric approach to health insurance, with a focus on improving the user experience in an industry that is notoriously complex and difficult to navigate. To receive a quote from Oscar, one must enter five pieces of information on a clean web page that automatically presents the next data entry field, meaning the user does not face more than one task at any one time and does not have to click "next page."  

In large, bold print, Oscar's FAQ web page states: "Insurance is confusing. Oscar makes it simple," and its subway ads promise to deliver "health insurance that won't make your head explode," adding, "and if it does, you're covered," according to Fortune.

5. The health insurer's eccentric name, cheeky cartoon branding and promise to make health insurance simple targets a young, digitally savvy market. "The causal, personal tone of Oscar's messaging stands in stark contrast to faceless, corporate sensibility of traditional health insurance companies," Fortune wrote in April.

6. However, Oscar's novelty could make winning the trust of its customers challenging. "As a new company inserting itself into an industry full of incumbents with household names, we are working hard to gain the trust of the people in New York and New Jersey," Mr. Schlosser told Fortune.

7. Like all start-ups, Oscar has experienced growing pains. Last summer, an Oscar user complained to the media about expensive bills from the insurer for medical care that was supposed to be covered, according to Fortune. While this sort of complaint is not unusual for insurers in general, Oscar's entire marketing campaign promotes an easy, surprise-free experience. After a bout of criticism, Mr. Schlosser admitted Oscar failed to adequately communicate how deductibles and healthcare plans work to its members.

8. However, in December 2014, after 18 months in business, Oscar's CEO told Fortune he is less fazed by the complexity of insurance policies than he is by the unethical pricing practices from healthcare providers, calling the billing tactics employed by many providers "obviously fraud." Price inflation may have been less palpable when employers covered healthcare costs, but as more individuals purchase their own plans under the Affordable Care Act, there is a "total disregard that the member has cost-sharing there," adding, "that audacity is totally shocking and mind-blowing."

9. The company differentiates itself as predominantly web-based, a nod toward the digitally-connected Millennial generation. According to Wired, Mr. Schlosser said it is this holistic approach to technology that lends Oscar a competitive advantage. "Just fixing the user experience won't be enough. We went to great lengths to create an incredibly close relationship between our technology and physicians." Oscar's efforts to better align physicians and technology has yielded some positive outcomes. For example, about 60 percent of Oscar members who have bronchitis have used the telemedicine feature to get a diagnosis and treatment, according to Wired.

10. Oscar offers its members an array of additional perks, raising the bar for other insurance companies, according to Wired. Members have around-the-clock access to free televisits with physicians, free checkups and cash incentives for getting a flu shot.

Earlier this year, Oscar partnered with Misfit Wearable to offer each member of its health plans a free wearable device. The insurer pays members $1 dollar for every day they walk a targeted number of steps. According to Fortune, roughly two-thirds of Oscar members have participated in the program, walking a combined 2.5 billion steps since December 2014, Mr. Schlosser said.

More articles on payer issues:
ACA enrollees less satisfied with insurance plans, poll finds
How payers and providers communicate: Q&A with NaviNet CEO Frank Ingari
2 CEOs who are shaking up healthcare: 10 things to know

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