Oscar Could Be the First Ever Health Insurtech to Make a Public Debut
New York-based health insurtech Oscar bagged $140 million in its latest funding round—trailing its $225 million haul just five months ago. For context, Oscar offers health insurance plans in 18 states and 286 counties across the US, which include individual, family, small group, and Medicare Advantage offerings.

Oscar has been rapidly scaling its tech-focused health insurance business over the past year—and we’re doubling down on our earlier prediction that it’s gearing up to make a public debut.

In January, Oscar linked up with big-name insurer Cigna to launch a commercial health plan for small businesses, dubbed Cigna + Oscar. The tie-up gave Oscar an inroad to Cigna’s massive provider network and helped the insurtech stake its claim in the small group health market, which consists of over 15 million US individuals.

And in July, it pulled the curtain back on a virtual-first care service, while announcing big expansion plans for 2021. In July, Oscar unveiled a new $0 Virtual Primary Care product for next year, through which it’ll offer members free and unlimited primary care visits, prescriptions and lab tests. And it announced it would be expanding into four new states and 19 new markets in 2021, citing that it will be the fourth consecutive year it’s expanded its footprint.

Given its latest funding round of funding, growing consumer base, and plans to further broaden its footprint, the insurtech could be preparing to file for an IPO. Oscar has a $2 billion revenue base this year, and it predicts continued growth—signaling to investors that it may have enough demonstrable cash flow to prepare for a public offering. Further, prior to an IPO, companies will often change up their leadership to bring on execs who have experience leading companies to profitability—and the insurtech hired a new CFO just two weeks ago. If Oscar does plan on going public, it will essentially be the first insurtech to do so—giving it major brand recognition and a competitive advantage over fellow insurtechs like Clover and Bright Health.

Insurtechs typically offer a broader range of virtual health services and tout transparent pricing in their plans—and one with the consumer mindshare a public offering brings could threaten to poach younger, cost-conscious consumers from legacy insurers.

Massive health insurers like UnitedHealth Group are typically bogged down by large member bases and legacy infrastructure that makes it more difficult for them to rapidly pivot to integrate innovative options similar to Oscar’s $0 Virtual Primary Care product, for instance. Further, insurtechs typically tout up-front pricing options, enabling them to lure an increasing number of US health consumers who report confusion surrounding the cost of their health insurance.

For example, tech-focused startup Bright Health boasts health plan options with zero deductibles to help members avoid unnecessary medical spending—and Oscar has a high-deductible, low monthly premium plan for members under the age of 30. As insurtechs like Oscar rapidly expand across the US with options that appeal to younger consumers, they’ll be in a better position to grab the attention of millennial and Gen Zers—leaving legacy health insurers in the dust.

Source: Business Insider

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