Lynn Wallace
And the hits just keep on coming! This week, Oscar Health, the self-proclaimed hipster health insurance disrupter, posted $105 million in losses...not just losses due to start-up costs but losses due to medical care costs that have far outrun projections. Valued at about $2.7 billion in its recent round of funding, Oscar was created to supposedly revolutionize the "corrupt and wasteful" health insurance system.
With youthful subway marketing, they tout themselves as a new kind of health insurance company that is using technology to make insurance simple, intuitive, and human. They deliver a mobile app with cool stuff like around-the-clock access to free televisits with physicians, free check-ups and cash incentives for wellness activities such as $1 a day for walking, or money for getting a flu shot, and a sleek insurance card delivered in an Apple-like box.
But while Oscar may get high marks for providing a well-designed, fun digital customer experience. It does not, however, appear to be doing much to reduce health care costs. In fact, in many instances, the cost of coverage through Oscar may actually be higher than with traditional carriers.
Side note – Most major insurers offer wellness discounts and cash back to those who join a select exercise facility. They also offer preventative care at no charge...and currently 29 states require that private insurers cover tele-health in the same way that they cover in-person services.
Disruption in insurance, unlike the taxi-cab or hospitality industries, has the potential to dangerously disrupt and destroy consumer lives through inadequate insurance protection, exorbitant fees, angry service providers, and consumers with no recourse but to bankrupt themselves to pay unexpected bills.
FastCompany recently reported, "Last summer, an Oscar user complained to the media about expensive bills from the insurer for medical care that was supposed to be covered ... While this sort of complaint is not unusual for insurers in general, Oscar's entire marketing campaign promotes an easy, surprise-free experience. After a bout of criticism, (the CEO) admitted Oscar failed to adequately communicate how deductibles and healthcare plans work to its members."
There you have it...the misstep related to consumer need and demand for professional insurance competency. I'm thinking that the Oscar user mentioned above would have preferred some help with those expensive medical bills over being paid for walking a certain number of steps each day.
By the way, Oscar had planned to pay brokers $14 per contract each month for individual subscribers ($26 for enrolled families) but last year announced they were cutting broker commissions to $6 per contract regardless of the number of people on the plan. At a time when Oscar is suffering from a lack of insurance competency, why choke the brokers? If they need to save money, why not eliminate the sleek medical card sent in the expensive Apple-like box and include a cool virtual I.D. card in their app?
The message: When consumers ask: "How can you help lower my health insurance cost?" Don't answer: "By giving you a well–designed, fun, digital experience that may cost you more and may lack insurance competency should you need help."
This week, since March is Insurance Industry Awareness month, let's take the opportunity to stand for "competency."
It's easy, just click below, log in to NDOI, go to your My News, click the pencil icon and Add Your Own Post.
It will be another collective shout-out across the country, a national reminder of the specialized expertise and competency value of professional insurance agents.
To save you time, here's a blog template to use... and feel free to include the
image attached here...
Lynne Wallace is the CEO and president of VANTREO Insurance Brokerage and co-founder of NDOI, the National Directory of Insurance.
