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Oscar Health and Cigna will discontinue their co-branded Cigna + Oscar business at the end of 2024.
On a May 7 call with investors, Oscar CEO Mark Bertolini said it chose not to renew the offering in 2025 as part of its strategy to focus on the individual market.
Launched in 2020, Cigna + Oscar offers group insurance plans for small businesses. The venture had 61,428 members as of March 31, 2024, according to Oscar Health's first-quarter earnings report.
Mr. Bertolini told investors both Cigna and Oscar "tried very hard" to get the business to a profitable place, but they could not find a way to make the Cigna + Oscar product work long term.
"More importantly, we believe ICHRA is the solution for small group and middle market, and we believe that that will be a much bigger opportunity and we want to focus on getting that right," Mr. Bertolini said.
ICHRA, or individual coverage health reimbursement arrangements, allow employers to offer employees contributions to purchase an individual health plan rather than offering group insurance.
Several payers, including Oscar, have said they see the ICHRA market as an opportunity for growth.
Oscar Health has scaled back its products in recent years. It dropped out of the Medicare Advantage market at the end of 2022. The company posted its first profit since it was founded in 2012 in the first quarter of 2024.
A Cigna spokesperson told Becker's the company is "committed to ensuring a smooth transition for our members."
"Partnering with small and midsize employers to meet their unique needs and serve their employees will continue to be one of our top priorities, and we are evaluating our options to continue serving the small group market in the future," the spokesperson said.
On a May 7 call with investors, Oscar CEO Mark Bertolini said it chose not to renew the offering in 2025 as part of its strategy to focus on the individual market.
Launched in 2020, Cigna + Oscar offers group insurance plans for small businesses. The venture had 61,428 members as of March 31, 2024, according to Oscar Health's first-quarter earnings report.
Mr. Bertolini told investors both Cigna and Oscar "tried very hard" to get the business to a profitable place, but they could not find a way to make the Cigna + Oscar product work long term.
"More importantly, we believe ICHRA is the solution for small group and middle market, and we believe that that will be a much bigger opportunity and we want to focus on getting that right," Mr. Bertolini said.
ICHRA, or individual coverage health reimbursement arrangements, allow employers to offer employees contributions to purchase an individual health plan rather than offering group insurance.
Several payers, including Oscar, have said they see the ICHRA market as an opportunity for growth.
Oscar Health has scaled back its products in recent years. It dropped out of the Medicare Advantage market at the end of 2022. The company posted its first profit since it was founded in 2012 in the first quarter of 2024.
A Cigna spokesperson told Becker's the company is "committed to ensuring a smooth transition for our members."
"Partnering with small and midsize employers to meet their unique needs and serve their employees will continue to be one of our top priorities, and we are evaluating our options to continue serving the small group market in the future," the spokesperson said.
