Oscar has announced they will close their California EPO individual and family plans at the end of 2023. They will not offer individual and family coverage either direct with Oscar or through Covered California. Oscar will continue to provide coverage and service for their existing members through the end of 2023.
Oscar individual health plans arrived in California in 2016. All their plans were EPO (exclusive provider organization) plan types. They worked just like a PPO (preferred provider organization), but there was no out-of-network coverage. Initially, the Oscar health plans were offered only in Southern California. In 2020 Oscar expanded into the San Francisco Bay Area.
Oscar California Health Plan Networks
It was during the expansion that Oscar began offering 2 different provider networks. Oscar split some of the more prominent providers (UCLA, Hoag) into specific plans that were only offered off-exchange direct from Oscar. This meant that Covered California consumers did not have access to the larger network of providers.
Oscar did a decent amount of marketing for their health plans through 2020. Then there was a noticeable shift. From an agent perspective, to get real information on the health plans for 2022 and 2023 was difficult. Oscar was slow to post the evidence of coverage documents and other collateral for California individual and family plans. It was almost as if they had left California in 2022.
The health plans from Oscar operated just as well as any other health plan being offered. I have several clients who were very satisfied with Oscar. Even with the smaller Covered California on-exchange Select Network of providers, many members found plenty of doctors to choose from. Many people will be sorry to see Oscar leave the individual and family market.
Oscar Member Mobile App
What was different for Oscar was an emphasis on member information delivered through a mobile phone application. While the mobile app had copious amounts of information (doctors, appointments, evidence of billing statements, review of deductibles, etc.) some people were not comfortable with that method of communication.
There are many consumers who want to talk to a human customer service representative to ask questions and resolve problems. While Oscar does maintain a staff of customer service representatives, it may not be as large and responsive as the larger more established health plans such as Blue Shield, Kaiser, and Blue Cross. Of course, many of the larger carriers have introduced their own mobile applications just like Oscar.
With the exit of Health Net health plans in the Bay Area, Oscar should have been in a good position to pick up members. Unfortunately, Anthem Blue Cross expanded their EPO health plans throughout Northern California, which included many Sutter doctors and hospitals. The expanded competition may have tempered any growth in Northern California.
Even though Oscar was in California for 7 years, they never develop strong name or brand recognition for their health plans. I was always surprised when a client would curse one of the big health plans, then turn around and enroll with the same health plan. I suppose it was better to deal with the devil you know. Relative to the other carriers, Oscar offered a competitive EPO health plan product that worked as advertised.
Oscar states that they plan to re-enter the California individual and family market with a different product or plan type in the future. This could be shorthand for HMO health plan. Southern California has plenty of HMO plans to select from. PPO and EPO seem to be an endangered species in certain parts of California. When those plan types are offered, they can be considerably more expensive than a narrow network HMO plan.
The California employer group plan combination of Cigna + Oscar for small business will remain in operation and is unaffected by the individual and family plan closures. It is only the individual and family plans that are closing. Oscar operates in several states and in addition to the individual and family and small group plans, they also offer Medicare Advantage plans in some states. Because of the depth of their commercial market insurance product portfolio, there is a high probability that Oscar will return to California.
Aetna entered the California individual and family market in 2023 with an HMO plan in Northern California. California can be a difficult market for health insurance outside of Southern California. For 2024, during open enrollment, current Oscar health plan members will need to shop for a different carrier as the Oscar health plans close.