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Oscar Health Grabs Share With Cleveland Clinic Branded Obamacare Plan

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Oscar Health said its partnership with the Cleveland Clinic to offer individual coverage in Ohio under the Affordable Care Act has greater market share than anticipated in its first year.

The New York-based startup, which has expanded Obamacare offerings this year to more states, said it enrolled more than 11,000 members in its co-branded health plans with the Cleveland Clinic. Executives said the enrollment was higher than expected and accounts for about 15% of the individual health insurance market in the five-county northeast Ohio area. Oscar Health's total enrollment is up 150% , or more than 250,000, after expanding into several new markets including the Cleveland area.

The enrollment is significant in part because individual health plans need enough customers for their risk pools, paying claims of sick patients and leaving enough to turn a profit and invest in product offerings. Bigger carriers including Anthem, Aetna and UnitedHealth Group scaled back their Obamacare offerings for 2018 after being unable to manage the rising costs of sick patients purchasing coverage.

The Cleveland Clinic-Oscar Health partnership is being watched closely as providers take on more financial risk in forming closer ties with insurance companies. CVS Health and Aetna are expected to offer more co-branded health plans once their deal closes later this year while Blue Cross and Blue Shield plans are also offering an increasing number of plans branded with providers in local markets.

Cleveland Clinic and Oscar describe their partnership as “a true 50/50 profit sharing of premium revenue.” Though early in their first year of operation, executives said one out of three Oscar health plan members have “already chosen a Cleveland Clinic primary care physician through Oscar health's onboarding platform online.”

The Oscar partnership with Cleveland Clinic also shows narrow networks, which limit choices of doctors and hospitals, are key to the future success of ACA-compliant health plans and health insurance generally. A 2016 study by the Blue Cross Blue Shield Association showed more than half of plans on the public exchanges offer narrow networks or exclusive provider arrangements.

Health insurers see a narrow network plan that limits choices as allowing insurers to more closely monitor quality and make sure patients are getting the right care, in the right place and at the right time.

"With over 11,000 sign ups in the first year, there is clearly strong demand for a product that combines Oscar’s member engagement and navigation capabilities with Cleveland Clinic's comprehensive, high-quality clinical network," said Oscar Health's chief policy and strategy officer, Joel Klein.

 

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