Newspaper article The Record (Bergen County, NJ)

Health Insurance Options Growing

Newspaper article The Record (Bergen County, NJ)

Health Insurance Options Growing

Article excerpt

For decades, the world of health insurance in New Jersey has been dominated by huge companies with billions of dollars in assets and millions of customers. But later this year, residents who shop for their own insurance will have a choice of two new companies -- one launched by young tech entrepreneurs and the other a non-profit cooperative.

The two upstarts are Oscar Insurance, the brainchild of Joshua Kushner, scion of the Kushner real estate fortune, and Health Republic Insurance of New Jersey, conceived by the Freelancers Union, an association of independent workers, and funded with loans from the federal government. If they succeed, they may just goad the traditional behemoths of insurance into a different way of doing business. And by increasing the competition for people who buy their own coverage, they may already be helping to hold down premiums.

"These innovative new entrants are shaking things up for the entire industry," said Ceci Connolly, managing director of PriceWaterhouseCoopers' Health Research Institute, which recently released a report asking, "Who will be the [health care] industry's next Amazon.com?"

With millions of new paying customers buying insurance nationwide, thanks to Obamacare, the market is wide open and attractive to both traditional and new insurance carriers. More than half a million people in New Jersey who didn't have insurance obtained it over the last year, according to a recent survey, receiving coverage through the new federal marketplace, the individual market, their jobs or Medicaid.

Oscar and Health Republic are among five companies that will offer insurance in New Jersey starting Nov. 15 through the Affordable Care Act's HealthCare.gov, the shopping site through which 162,000 residents here bought coverage for 2014. The others are Horizon Blue Cross Blue Shield of New Jersey, the state's largest insurer; AmeriHealth of New Jersey, and UnitedHealthcare, the nation's largest insurer. United jumps into New Jersey and two dozen other states with Obamacare plans for the first time this year, but already insures more than 1.6 million people here through Medicare, Medicaid and employer-sponsored plans.

So far, the start-ups have barely made a dent in the New Jersey market.

Health Republic suffered with the disastrous rollout of the HealthCare.gov website a year ago and enrolled just 4,000 New Jersey residents its first year. Oscar, which starts selling in the state in five weeks, has about 17,000 members in New York City and surrounding counties.

Their biggest impact, however, may lie in the way they disrupt business as usual. "The new players typically are more nimble. They are more consumer-friendly," Connolly said. "That is serving as a wake-up call to the entire industry." They are forcing insurers, who long have dealt with human-resources directors or other big purchasers, to focus on individual customers.

Each will do that somewhat differently: Oscar appeals to digital natives with its smartphone apps and integration of "tele-health" into all its plans. Health Republic differentiates itself through its non-profit philosophy of membership control.

Subway ads

Oscar brought humor to the staid world of health insurance when it debuted its New York City subway ads last year. "Get a bright, articulate doctor to call you back without having to join a dating site," read one. "Health insurance that won't make your head explode," read another. "And if it does, you're covered."

That message will be coming soon to the Hoboken and Secaucus train stations and the insides of some NJ Transit buses and railcars. Oscar is licensed to sell policies in the state's nine northernmost counties, including Bergen and Passaic. The company's goal is to sell to about 10 percent of the people who buy during the three-month open-enrollment period.

Founded by three friends who graduated from Harvard Business School, Oscar is named after the 29-year-old Kushner's great- grandfather. …

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