Oscar Health: A Pirate Ship Among Spanish Galleons

Added: 2026-05-21

[00:00:00]Oscar Health is a relatively small but fast-growing health insurance company that's doing things a little bit differently. They're playing in the ACA market and that's very different than the employer-provided insurance that you may be getting already. But this is a stock with tremendous potential that could fit in the asymmetric portfolio.

[00:00:16]So I wanted to learn more about the company and I had it recently had a chance to sit down with CEO Mark Bertolini. What you're going to see here is a clip of the full interview which I will put in the show notes. And here I'm asking why the company is so different than its competitors in health care and how it's going to be disruptive from inside the system rather than coming from the outside. Enjoy. So we believe at Oscar that we're a pirate ship among Spanish galleons filled with gold.

[00:00:42]Yeah, I like that. And all we have to do is take their business. And the way we take their business is we provide a product that meets individual needs.

[00:00:52]So we believe every American should be able to buy an individual policy. I can buy my network and as my life changes I can buy a plan design that works for me in that stage of life. So young single, newly married, starting a family, teenagers in the home, empty nesters, aging gracefully. All those sorts of things we should be building a lifestyle approach.

[00:01:15]And if I can pick my network and I can use my bucket of money from my employer or from the government, wherever it comes from, I can keep my network for life. It was all the way back to one of the original promises of the ACA, you You can keep your doctor.

[00:01:31]Yeah. You can keep your hospital.

[00:01:33]And secondly, when you have a lifetime relationship with that network and that insurance company, the investment horizon is fundamentally longer, the lifetime value of the member is fundamentally higher, and the investment protocol is going to change because I want to keep that person healthy over their lifetime. So one of the products we offer is we offer a product called Hello Menopause here at Oscar. It's for women going through menopause. It has bone density scans. It has hormone replacement therapy. It has counseling. And so, we want to build those products. Our diabetic product is around diabetics.

[00:02:09]Product for people with COPD or asthma.

[00:02:12]And we're all looking at these lifestyle products and getting ready for a company that at some point when people buy what they want and what they need, they actually get what matters to them and they keep it. So, then the incentive structure becomes your your treating people better.

[00:02:29]That's lower cost than what we currently have today. Therefore, I'm going to take market share because my insurance my my premium is what people are actually going to pay is going to be lower overall. Is that sort of the >> it's going to be lower. It's going to fit me, right? So, we all make So, the highest line item right now in America American household budget today is health care.

[00:02:50]Yep. The average Americans making $60,000 a year. Their average health care costs are $16,000 a year for a family of four.

[00:02:57]Yeah, it's crazy. Right? No transparency, no ability to shop. It is what you get.

[00:03:03]Mhm. The next is The next is houses housing. The next is transportation. Then there's groceries and then there's education.

[00:03:14]All those other four you can shop.

[00:03:16]Yeah.

[00:03:17]That's why new car margins are 2% cuz you can go find the car you want. You pick what you want and then you tell them how you're going to pay for it.

[00:03:25]And so, this idea of doing the same thing in health care requires us to put the individual on the front of the queue.

[00:03:32]Have them buy the network they're going to go to. Have them buy the product design that fits their current profile in life and risk.

[00:03:42]And allow them over time to change it as they need it, right?

[00:03:46]I used to I have I have Harley motorcycles. I probably shouldn't be riding them at my age. I should be in the sedan. Or or you should be riding a more. Maybe I should instead of working.

[00:03:56]Yes. Uh but but the whole idea is to create this ability for people to move through time about what they want at their level of risk, at their level of affordability.

[00:04:07]And what we've seen in the ACA over the last 4 years until this last year, when we had these big morbidity changes, is the average trend increase was 3.2%.

[00:04:18]What does it What does that mean? The increase in rates was 1 to 3% a year.

[00:04:22]Okay.

[00:04:23]Okay. versus 20 to 30% in the fully insured small group market. Okay. So, what we saw was actually health care cost trends in the ACA was less than inflation. Mhm. Which is the definition of a reformed health care system.

[00:04:39]Our health care costs don't rise as much as our inflation does. I want to go back to that transparency and cost piece in just a second, but while we're while we're talking about that the network, does the network play a role in a decision to choose Oscar? And then does the network play a role in Oscar or in customers?

[00:04:56]Because it's it almost seems like there's a symbiotic relationship potentially of Okay, if I go to this doctor, then the doctor says, "Hey, you know, work with Oscar. This is our in then in then you sort of get this suite of care." Whereas, you know, I don't know, just our personal like we have Delta Dental, but now the dentist decides they don't want to take the Delta Dental, so there's this new convoluted relationship. It's almost like you're creating an ecosystem. Is that kind of the right way to think about it? Exactly. We're creating an experience, a member experience that matters to the member versus an experience that the employer defines or the government defines for you.

[00:05:30]We're going from break fix, when you get broken, come on in, we'll fix you with some out-of-pocket costs, to one that says we're going to invest in what you need. And so our tools at Oscar, one of them's called Oscar Well, allows a member to download their medical record into our technology, into a vault, protected for them.

[00:05:50]Allows them to query against the system about a journey they're about to take.

[00:05:55]Knee replacement, hip replacement. I'm just diagnosed diabetic or I've got cancer, and they can work with their doctor to build a care plan inside the system. We can then tell them, here's how much it cost.

[00:06:09]Even before you do the thing. Anything.

[00:06:12]And by the way, any approvals that are needed, we highlight for the physician and the member, here are the criteria you need to get them approved, put them in, they're automatically approved.