Oscar holds off on new +Oscar agreements to shore up its Health First deal

The news: In its Q2 earnings call, insurtech Oscar Health revealed it’s pumping the brakes on new deals for the +Oscar tech platform for 18 months.

Oscar will concentrate on developing individual components in +Oscar like the Campaign Builder automation platform. It will also grow Oscar’s virtual primary care offering, enhance the company’s overall infrastructure, and address post-launch challenges in its January 2021 deal with Florida-based insurer Health First Health Plans. For context, the deal will let Health First Medicare Advantage and individual customers get access to Oscar’s member engagement platform and provider and broker services.

Shuffling resources: CFO R. Scott Blackley noted in the earnings call that Oscar would avoid overextending by taking on new deals for +Oscar. The company will focus on gaining profitability for the insurance business in 2023 and overall profitability in 2025.

Trendspotting: Oscar Health isn’t the only insurtech experiencing trouble.

  • Bright Health and Clover Health are also not yet profitable.
  • Plus, in Q1'22 insurtech funding dropped 58% quarter-over-quarter from Q4'21, hitting $2.2 billion—the worst mark since Q2'20, per the CB Insights State of Insurtech Q1’22 Report.
  • And insurtechs Next Insurance and Thimble recently announced layoffs.

The big takeaway: Oscar’s pullback on +Oscar could be a sign of hiccups in the insurtech space. Insurtechs are still growing, but given the economic uncertainty, they may take a more cautious approach to expansion.

Go deeper: Check out our Era of Uncertainty: Insurance report for more on the insurtech market in today's economic environment.

This article originally appeared in Insider Intelligence's Digital Health Briefing—a daily recap of top stories reshaping the healthcare industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

"Behind the Numbers" Podcast