Oscar Health (Oscar) has filed an amended registration statement on February 22, 2021 for a proposed initial public offering (IPO) of 31,000 Class A shares. The company describes itself as having “one foot in consumer technology and the other in health care”. Oscar had 529,000 members as of 1/31/2021, serving 291 counties across 18 states. Its members had five million health care visits in 2020, and as of 1/31/2021, its average individual per member/per month (PMPM) direct policy premium was $515. Its draft prospectus emphasizes its full stack technology platform and member engagement engine as key strategic assets.

Oscar currently sells policies in the individual, small group and Medicare Advantage markets. Key results for calendar years 2019 and 2020 are:

  2019 2020
Premiums before ceded reinsurance $1,041,145,000 $1,672,339,000
Premiums net of reinsurance $468,861,000 $455,035,000
Net losses ($261,182,000) ($406,825,000)
Adjusted EBITDA ($222,173,000) ($402,447,000)
Medical loss ratio 87.6% 84.7%

 

In addition to issuing insurance policies, Oscar states that it is starting to monetize its technology platform through co-branded partnerships. These are partnerships with Cleveland Clinic in the individual market, Montefiore in the Medicare Advantage market, Cigna in the small group market, and Holy Cross and Memorial in the Medicare Advantage market. In 2021, Health First engaged Oscar to provide administrative services, including access to Oscar’s member engagement platform, to individual and Medicare Advantage members.

Following the IPO, Oscar will have two classes of shares. Class A shares will be entitled to one vote, and Class B shares will have 20 votes. The Class B shares are held by Thrive Capital and the co-founders. The draft prospectus notes that Oscar qualifies as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012. This entitles Oscar to exemptions from certain reporting requirements otherwise required for public companies for up to five years, or until it no longer qualifies as an emerging growth company.

The preceding is derived solely from Oscar’s filings with the Securities & Exchange Commission and does not constitute investment advice. Digital Age Healthcare LLC is not an investment advisor.

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