Oscar Health and Bright Health are curbing MA expansion, for now
Bright Health is exiting the ACA market to focus on ACO Reach and both CEOs are looking at partnerships.
Photo: Kittiphan Teerawattanakul EyeEm/Getty Images
CEOs of both Oscar Health and Bright Health said this week during earnings calls that their companies are drawing back on their Medicare Advantage business. Bright Health Group's president and CEO Mike Mikan said Wednesday that the company is leaving the Affordable Care Act market and the MA market in all but California. Oscar Health is leaving the MA market, at least for now, to focus on ACA plans.
Oscar has exited its organic MA business in New York and in Texas, said CEO and founder Mario Schlosser.
"And (the) MA market is a market we want to eventually go back to do more in, but the way for us to be in this market is through partners," Schlosser continued. The strategic focus is on Affordable Care Act plans, he said.
"We at Oscar have lived two years where the markets were stable," Schlosser said. "And even against the complex backdrops, we've been grinding out improved performance. Hence, we don't grow tired of saying this, but the individualized ACA market looks to us much more like the future of a competitive U.S. healthcare system than any other health insurance markets."
The long-term sustainability of the marketplace is evidenced by what looks to be record-high membership and the return of many traditional players for this open enrollment, he said.
"So it is smart to be really good at it," he said, especially for the players that remain in the market.
"And that being said, recent competitor exits demonstrate just how hard it is to navigate the ACA without having a profitable insurance business and without owning a modern day infrastructure," Schlosser said. "Oscar is, of course, paying attention to these lessons."
Oscar is also looking at its technology stack platform +Oscar that is available to payers and providers.
"We've got to solve the question of, how do we sell +Oscar in a more effective and efficient way," Schlosser said. "And how do we implement +Oscar in a more effective and efficient way with third-parties?"
In other strategic developments, effective December 1, CFO Scott Blackley will take on a new role as Chief Transformation Officer for Oscar Health. Former CFO Sid Sankaran will rejoin Oscar at that time as Interim CFO.
BRIGHT HEALTH
Bright Health Group's president and CEO Mike Mikan said Wednesday Bright Health will no longer offer individual and family health plans for 2023 or Medicare Advantage health plans outside of California.
"We have a scaled Medicare Advantage business in California, the largest market for aging and underserved populations," Mikan said.
"And we expect to expand our footprint over time serving the aging and underserved consumers and Medicare and the consumer marketplace together with our key health plan partners," he said.
Bright Health is focusing on its NeueHealth business and on continuing to grow its partnerships with external payers and the government through the ACO REACH program, Mikan said. NeueHealth is a multi-payer, multi-segment business.
In Florida and Texas, its NeueHealth risk-bearing care delivery and provider affiliate management business continues to deliver differentiated results, according to Mikan.
"While we are exiting the ACA marketplace insurance business at our core, we are focused on serving aging and underserved populations through our fully aligned care model," Mikan said. "And we see significant growth opportunities for our Medicare Advantage and new health businesses serving this population. Both businesses are in attractive markets with strong tailwinds where we have demonstrated differentiated performance and are expanding our payer and align provider relationships."
He continued, "We have begun implementing the restructuring plans to adjust our cost structure in order to achieve our 2023 gross margin and operating expense targets, including impacts to many of our employees. We will continue to take steps to adjust our expenses in line with milestones in the marketplace business through the end of the year and over the course of the run-out period."
THE LARGER TREND
In April, after a year in which the company struggled financially, Bright Health Group said it would be exiting six markets and would no longer offer individual or family plans in Illinois, New Mexico, Oklahoma, South Carolina, Utah or Virginia.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
