Oscar Health, the original buzzy health insurance startup, has filed to go public. We pored over its 208-page filing to find 4 key takeaways.

  • Oscar Health, the insurer founded by Joshua Kushner and Mario Schlosser, has filed to go public.
  • Its S-1 filing lays out its financials and reveals its dual-class stock structure that allows cofounders to keep control.
  • We pored over its 208-page filing to find the key takeaways. 
  • Visit the Business section of Insider for more stories.

Oscar Health, the health insurance company founded by Joshua Kushner and Mario Schlosser, has filed to go public.

The New York-based health insurer filed paperwork on Friday for an initially public offering, after revealing that it had filed confidentially with the SEC in December.

Oscar, which was founded in 2012, has raised $1.6 billion from investors since its inception.

It is one of the first hot insurer startups that built a reputation on being a consumer-focused, technology-driven health plan. Each member is guided by a “concierge” care team. Health insurer Clover Health, a competitor to Oscar,went public in January in a $3.7 billion SPAC deal.

While Oscar has grown rapidly and now serves over half a million people in 18 states across the US, it’s never turned a profit, and its losses continue to mount.

The filing says that Oscar plans to raise $100 million, which is a placeholder amount and can change. The company plans to trade on the New York Stock Exchange under the ticker “OSCR.”

We read through the insurer’s 208-page filing to learn more about Oscar’s strategy. Here are four key takeaways. 

Oscar’s financial losses mounted amid its rapid expansion

Oscar laid out its financial performance. The insurer’s net loss widened to $406.8 million in 2020, from $261.2 million in 2019.

Meanwhile, several other publicly traded health insurers grew their bottom lines in 2020, as their members put off going to the doctor during the pandemic and insurers paid fewer medical claims as a result.

Its revenue also fell to $462.8 million in 2020, down 5.2% $488.2 million the year before. 

Oscar’s noted in the S-1 that it’s never turned a profit since its inception in 2012 and had an accumulated deficit of $1.4 billion at the end of 2020.

The insurer also highlights the risk that it may never become profitable, as it plans to continue making significant investments to expand its business and develop its technology.

Oscar’s membership has topped half a million, but it’s made little headway in the red-hot Medicare Advantage market

Oscar’s membership totals 529,000 people as of January 31.

As of the end of 2020, most of Oscar’s members — 79% — are in plans sold on the ACA health insurance marketplace. Oscar sells health plans in 18 states in 2021, up from 15 last year.

Oscar also sells coverage to small businesses and seniors enrolled in Medicare Advantage, a private alternative to the traditional Medicare program.

It’s had trouble growing its Advantage business after entering that market in 2020. It covers just 3,200 people in the plans, according to federal data.

In 2020, Florida was its biggest market, followed by California and Texas.

Oscar’s cofounders and Kushner-backed Thrive Capital are using a dual-class stock structure so they can keep control of the company

Oscar will have a dual-class stock structure, which is common among Silicon Valley startups.

It said that after it completes the IPO, it will have two classes of common stock: Class A and Class B. Kushner-backed Thrive and the company’s co-founders will be the only holders of Class B common stock.

Oscar said the dual-class structure of its common stock would concentrate voting control with investor Thrive Capital and its co-founders, limiting the ability of its shareholders to influence the company, elect directors or approve changes in control.

Beyond Thrive Capital, Oscar’s biggest shareholders include Alphabet, FMR, Formation 8, Founders Fund, General Catalyst, and Khosla Ventures.

Oscar lays out plenty of risk factors, including a long COVID-19 outbreak

Oscar said the coronavirus pandemic could lead to long-term health problems that are not yet known or understood. If an ongoing outbreak resulted in many members needing ongoing care, Oscar’s expenses could increase.

Oscar also highlighted the heightened scrutiny that health insurers, especially those in the Medicare Advantage market, are under for False Claims Act cases. The government has put a microscope on insurers’ diagnosis coding and risk-adjustment practices.

It expects that scrutiny to continue, since the US Health and Human Services Department in December 2020 created a new False Claims Act working group to partner with the DOJ to combat fraud, it said.

Oscar also said some of its health plans may be subject to audits that could result in adjustments to payments, fines and other adverse actions by the US Centers for Medicare and Medicaid Services.

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