Aetna ACA exit is bad for marketplace, good for Oscar: CEO Bertolini
Oscar Health (OSCR) CEO Mark Bertolini has helped lead the insurance tech company into a period of consistent profitability after years of losses.
The veteran health insurance executive has become an industry advocate for change, calling the existing employer-sponsored insurance market broken. He told Yahoo Finance in an interview Thursday that healthcare is the only place in the economy where individuals lack choice over decisions.
"I know what my concerns are for my health, I know what I need, why am I having to go through the insurance company to get it approved?" Bertolini said.
It's why Oscar has worked on accessing health services through its technology-enabled platforms. The company boasts a long-time relationship with OpenAI (OPAI.PVT), which has helped it create plans and products that are "frictionless," Bertolini said.
"Those frictionless care models allow me to get what I need, on my terms, at my cost," he said. "Everywhere else in our economy, we can get that."
But not in healthcare, where insurance plans are designed by employers for maximum options to cater to the diverse needs of the employee population — which raises the overall cost of insurance.
Bertolini, formerly the CEO of Aetna (CVS), said this is why the narrow networks and lower cost options in the Affordable Care Act marketplace are better for individuals. And why Aetna's exit isn't good for the market.
"The more players in the market, the better, in large part because everyone has narrow networks ... [which] allow you to get a lower price point, because you're moving revenue to fewer players," Bertolini said.
That also helps keep insurers profitable, as it balances the number of high-cost and low-cost patients in the mix at any given time.
"Our view is we don't need to get all the members," Bertolini said. "We want the members that need our products and our networks. We want to serve them well at a price point that, for the last three years, has been at or below the cost of inflation."
Still, Aetna's exit bodes well for Oscar, which had "significant overlap" with them, Bertolini said on an earnings call Wednesday.
"We view that as an opportunity to help people maintain their coverage at a level of pricing that we find disciplined and competitive in the marketplace," he said.
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.
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