Oscar Health going all in on ICHRAs

Oscar Health going all in on ICHRAs

Employers can use ICHRAs to provide cash that workers can use to buy their own individual or family health coverage through HealthCare.gov or a locally run Affordable Care Act public health exchange.

“Small and mid-sized businesses are struggling to offer health insurance at reasonable costs,” Mark Bertolini, Oscar’s chief executive officer, said Wednesday during a conference call with securities analysts. “We are working with ICHRA platforms to meet these unmet needs and make Oscar a preferred carrier of choice.”

Oscar wants to team up with brokers that can offer its coverage to ICHRA plan sponsors and brokers or other partners that can help the ICHRA plan sponsors’ workers sign up for coverage.

“So far, our learnings have been strong,” Bertolini said. “By 2025, we believe we’ll have some very, very positive results coming in. We’ve got a lot of interest. A lot of interesting opportunities.”

Oscar presented a chart showing that it expects to operate in an ICHRA services ecosystem that includes ICHRA service providers such as Benefitbay, Liferaft, Remodel Health, SureCo, StretchDollar, Take Command, Thatch, Venteur, Zizzl Health and Zorro.

The earnings

Oscar held the conference call to go over earnings for the second quarter,

The New York-based companies reported $56 million in net income for the quarter on $2.2 billion in revenue, up from a $15 million net loss on $1.5 billion in revenue for the second quarter of 2023.

The ICHRA

The individual coverage health reimbursement arrangement is a mechanism employers can use to revive the old premium-only plan strategy, or efforts to give workers they can use to get their own coverage.

The 2014 launch of the Affordable Care Act major medical coverage framework revived interest in cash-for-coverage plans by making health insurance policies available to workers through HealthCare.gov and other ACA exchange programs on a guaranteed-issue basis, without requiring complicated price adjustments for enrollees with health problems.

Policymakers developed one cash-for coverage arrangement, the qualified small employer HRA, in 2016 and had the ICHRA ready to go in 2019.

As ICHRA providers were preparing to launch major ICHRA marketing efforts, in 2020, COVID-19 swept in and crowded out most discussions about ICHRAs.

This year, ICHRAs are getting what amounts to a second chance.

Current ICHRA enrollment figures are hard to find, but the number of workers with ICHRA cash could exceed 2 million by 2027, according to Oscar projections.

One helpful factor is efforts by lawmakers in states like Indiana and Texas to clear away state rules that may slow ICHRA adoption, Bertolini said.

ACA public exchange system acceptance

Another helpful factor is what appears to be growing, bipartisan acceptance of the ACA public exchange framework, Bertolini added.

“We are seeing a notable shift in sentiment from federal and state policymakers,” Bertolini said. “They are moving beyond repeal and replace to creating constructive solutions that position their marketplaces to better serve more Americans.”

Bertolini sees the ACA exchange system winning support by bringing insurers good business.

“The ACA is the fastest-growing market in health insurance and has created the largest risk pool in the industry, resulting in a significantly lower cost trend than conventional employer-sponsored health coverage,” he said.

He credited the exchange system for cutting the small business employee uninsured rate to 16%, from 25% before the ACA exchange system came to life.

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