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The article heavily focused on Oscar's user experience and customer service strengths, but buying health insurance really comes down to getting the most coverag

The article heavily focused on Oscar's user experience and customer service strengths, but buying health insurance really comes down to getting the most coverage at the lowest price. If you aren't attacking health insurance from an actuarial standpoint (reducing costs/lowering premiums) I find it really hard to believe businesses are going to move to your platform. Eventually, Oscar is going to have to come off the VC teet and still pay all their expensive programmers and google VPs while staying price competitive. Would have been a much better read if the article would have addressed how they plan to do this. My guess is using tech to make their members healthier and boost preventive care, thus lowering premiums.

chromedude 9y ago
Your guess is exactly right.
exelius 9y ago
The thought is that, especially with expensive chronic illnesses like diabetes or heart disease, getting the patient to stick to their treatment plan has a dramatic effect on costs. Fewer hospital visits means drastically lower costs, and having even a marginal shift in utilization of routine maintenance regimens can move the needle on costs. That's the theory, anyway. It might work, because the health insurance industry is a mess and is just now finishing migrations to modern IT platforms. A well-funded upstart like Oscar could easily come in with a modern analytics core and undercut on administrative costs. Many of these companies don't have people who know how to deal with the volume of data in a migration.
- throwaway2048 9y ago
  just what we need, healthcare spyware.. err sorry "analytics" that "encourages" you.
- Retric 9y ago
  Research does not really back that up. You pay less per year on average per person, but now your sick people live longer so you pay for more years. Now, private insurance may get around this assuming the sick person moves on to someone else's balance sheet, but for the health care system there is no real savings.
  - exelius 9y ago
    Yeah, I tend to agree with you. But at the same time, none of the existing insurance companies have good enough analytics to handle this well. The thought is that "maybe Oscar can find a better way? Or at the very least build a software platform we can license to other insurance companies..." My thought is that Oscar is ultimately a platform play; not an insurance company.
  - aaronbrethorst 9y ago
    Huh, that sounds like a great reason to move to single payer.
  - wbl 9y ago
    Your per annum costs determine premiums, plus the person can work longer.
    - koolba 9y ago
      On the whole, not the individual as there's no discrimination on the health of the customer. It's entirely possible for an insurer to end up with a bad pool through attrition of healthy people.
- MisterBastahrd 9y ago
  The problem with treatment plans is that most of the ill have jobs, families, and most of the obligations those entail on top of that. The US in particular tends to promote the ideal of putting yourself at risk so your family can have a better life. My sister became diabetic after having her second child. Her kids are VERY active, her husband is often away for work, and she's a nurse. The biggest positive impact on her health? Getting a pump to regulate insulin dosage so that she didn't have to think about it anymore. This is a positive thing. Meanwhile, my workplace has instituted one of those pedometers that tracks your activity and reduces your healthcare costs. People are worried not only about what it tracks, but what business it is of their employer to know how active they are outside of the office to begin with.
  - pjc50 9y ago
    > my workplace has instituted one of those pedometers that tracks your activity Hang on - tracks your activity out of work? Are you paid for the full 24 hours? No. So you're performing unpaid labour (walking) for them? Might want to consider a union there.
    - aninhumer 9y ago
      I'd imagine the pedometer is a condition of the health insurance provided by the employer, not a condition of employment itself. So they could choose not to wear it, but then they wouldn't be insured. It sucks and should be challenged, but it's not "unpaid labour".
sjg007 9y ago
The market is young people with no claims. They subsidize the more expensive cases. The other side of the coin is negotiating power vs the hospital for actual costs paid. All of these PPOs and HSAs are a complete joke and just pass the buck. They let young people gamble but are a shell game where either the provider doesn't get paid the initial deductible or the individual takes a huge hit. For anyone over 40 or with a family they are non-starters. I've listened to HR push these plans and I just shake my head at the stupidity. The "hurt his ankle" as inspiration seems trite and contrived. Insurance companies profit by denying claims, increasing premiums and negotiating payment. Their profits should be regulated as a function of premiums and claims. In the ACA space the most profitable plans will be those that most young people sign up for (usually with less benefits since they assume more risk).
- bpodgursky 9y ago
  I have a (reasonably) cheap high deductible HSA plan with something like a $5k out of pocket max. > They let young people gamble but are a shell game Given that I'm required to have insurance, how is this a gamble? I can easily cover $5k cash, and most years I never even go to the doctor. Why is this plan bad for me? (I'm not suggesting it's great for _all_ young people, but I think a very large percent are better on them than other expensive gold plans).
  - cmurf 9y ago
    The HSA might be worth the cost of a bronze plan even if the mandate goes away: 1. Tax deduction going in, like a traditional IRA so it reduces this year's income tax. 2. Grows tax free with tax free withdrawals for qualified medical expenses, like a Roth IRA. 3. If you use it for an unqualified expense there's no penalty, but you do pay income tax, again like a traditional IRA so you're no worse off. 4. you don't ever have to withdraw like you do with a traditional IRA. 5. You're young, so if you max out the contributions every year, this HSA will be worth a lot when you need it. i.e. you don't actually ever take money out of the HSA for medical expenses until you're older or really need it. You pay today's medical bills before the deductible via pay out of pocket. Chaching. But I still consider this for profit insurance system a big fat scam on the working poor to upper middle class.

chromedude 9y ago

Your guess is exactly right.

exelius 9y ago

The thought is that, especially with expensive chronic illnesses like diabetes or heart disease, getting the patient to stick to their treatment plan has a dramatic effect on costs. Fewer hospital visits means drastically lower costs, and having even a marginal shift in utilization of routine maintenance regimens can move the needle on costs. That's the theory, anyway. It might work, because the health insurance industry is a mess and is just now finishing migrations to modern IT platforms. A well-funded upstart like Oscar could easily come in with a modern analytics core and undercut on administrative costs. Many of these companies don't have people who know how to deal with the volume of data in a migration.

throwaway2048 9y ago
just what we need, healthcare spyware.. err sorry "analytics" that "encourages" you.
Retric 9y ago
Research does not really back that up. You pay less per year on average per person, but now your sick people live longer so you pay for more years. Now, private insurance may get around this assuming the sick person moves on to someone else's balance sheet, but for the health care system there is no real savings.
- exelius 9y ago
  Yeah, I tend to agree with you. But at the same time, none of the existing insurance companies have good enough analytics to handle this well. The thought is that "maybe Oscar can find a better way? Or at the very least build a software platform we can license to other insurance companies..." My thought is that Oscar is ultimately a platform play; not an insurance company.
- aaronbrethorst 9y ago
  Huh, that sounds like a great reason to move to single payer.
- wbl 9y ago
  Your per annum costs determine premiums, plus the person can work longer.
  - koolba 9y ago
    On the whole, not the individual as there's no discrimination on the health of the customer. It's entirely possible for an insurer to end up with a bad pool through attrition of healthy people.
MisterBastahrd 9y ago
The problem with treatment plans is that most of the ill have jobs, families, and most of the obligations those entail on top of that. The US in particular tends to promote the ideal of putting yourself at risk so your family can have a better life. My sister became diabetic after having her second child. Her kids are VERY active, her husband is often away for work, and she's a nurse. The biggest positive impact on her health? Getting a pump to regulate insulin dosage so that she didn't have to think about it anymore. This is a positive thing. Meanwhile, my workplace has instituted one of those pedometers that tracks your activity and reduces your healthcare costs. People are worried not only about what it tracks, but what business it is of their employer to know how active they are outside of the office to begin with.
- pjc50 9y ago
  > my workplace has instituted one of those pedometers that tracks your activity Hang on - tracks your activity out of work? Are you paid for the full 24 hours? No. So you're performing unpaid labour (walking) for them? Might want to consider a union there.
  - aninhumer 9y ago
    I'd imagine the pedometer is a condition of the health insurance provided by the employer, not a condition of employment itself. So they could choose not to wear it, but then they wouldn't be insured. It sucks and should be challenged, but it's not "unpaid labour".

sjg007 9y ago

The market is young people with no claims. They subsidize the more expensive cases. The other side of the coin is negotiating power vs the hospital for actual costs paid. All of these PPOs and HSAs are a complete joke and just pass the buck. They let young people gamble but are a shell game where either the provider doesn't get paid the initial deductible or the individual takes a huge hit. For anyone over 40 or with a family they are non-starters. I've listened to HR push these plans and I just shake my head at the stupidity. The "hurt his ankle" as inspiration seems trite and contrived. Insurance companies profit by denying claims, increasing premiums and negotiating payment. Their profits should be regulated as a function of premiums and claims. In the ACA space the most profitable plans will be those that most young people sign up for (usually with less benefits since they assume more risk).

bpodgursky 9y ago
I have a (reasonably) cheap high deductible HSA plan with something like a $5k out of pocket max. > They let young people gamble but are a shell game Given that I'm required to have insurance, how is this a gamble? I can easily cover $5k cash, and most years I never even go to the doctor. Why is this plan bad for me? (I'm not suggesting it's great for _all_ young people, but I think a very large percent are better on them than other expensive gold plans).
- cmurf 9y ago
  The HSA might be worth the cost of a bronze plan even if the mandate goes away: 1. Tax deduction going in, like a traditional IRA so it reduces this year's income tax. 2. Grows tax free with tax free withdrawals for qualified medical expenses, like a Roth IRA. 3. If you use it for an unqualified expense there's no penalty, but you do pay income tax, again like a traditional IRA so you're no worse off. 4. you don't ever have to withdraw like you do with a traditional IRA. 5. You're young, so if you max out the contributions every year, this HSA will be worth a lot when you need it. i.e. you don't actually ever take money out of the HSA for medical expenses until you're older or really need it. You pay today's medical bills before the deductible via pay out of pocket. Chaching. But I still consider this for profit insurance system a big fat scam on the working poor to upper middle class.