Oscar Health Says It Needs Brokers

The IPO

Oscar has left key parts of the current version of the registration statement blank or put in what are believed to be temporary, “placeholder” figures.

The IPO could raise at least $100 million. Shares would trade on the New York Stock Exchange, with the stock symbol “OSCR.” Goldman Sachs would lead the list of underwriters.

Registration Statement Details

For Alphabet Holdings LLC and other Oscar investors, the IPO would create a chance to cash out.

For agents and brokers, the IPO is a chance to learn a little about what’s happening inside a company that, at this point, is focused mainly on the individual and small group commercial health insurance markets.

Today, the biggest publicly traded health insurers — Anthem Inc., Centene Corp., Cigna Corp., CVS Aetna, Humana Inc., Molina Healthcare Inc. and UnitedHealth Group Inc. — are focused mainly on the Medicaid, Medicare or large employer markets, or on activities other than providing health insurance.

Oscar’s reports might give outsiders a better picture of what’s happening in the individual and small group markets.

Here are some details from the registration statement:

Results: Oscar reported a $406 million net loss for 2020 on $463 million in revenue, compared with a $261 million net loss on $488 million in revenue for 2019. The company produced $223 million in positive net cash flow in 2020, up from $165 million in negative cash flow in 2019.

Reinsurance: In some ways, Oscar may be more like a health insurance distributor that retains some risk than an insurer. In 2020, it retained only 23% of the risk associated with the health insurance it sold. It passed 32% of the risk to AXA France Vie through one reinsurance arrangement, and 45% to Berkshire Hathaway Specialty Insurance Company through another reinsurance arrangement.

Affordable Care Act Premium Tax Credits: Oscar sells much of its coverage through the ACA public exchange system, to people who qualify for ACA premium tax credits. About 60% of the direct policy premiums Oscar collected in 2020 came in from the Centers for Medicare and Medicaid Services, in the form of advance premium tax credits.

— Read Oscar Insurance Raises $225 Million, on ThinkAdvisor.

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