For a very long time, health-insurance advertisements, like health-insurance companies, were stolid and relatively predictable things. There was the one with the clip art of the smiling doctor (signifying wisdom and confidence), and the one with the photograph of the proud old stone building (permanence and trustworthiness), and the one with the attractive and toned young people exercising (sign up with us, and this could be you forever).
Then, last October, a new breed of health-care ad began cropping up on the subway. The tone was Nickelodeon meets Manhattan Mini Storage—cuddly cartoon avatars and exceedingly clever copy, intended to make New Yorkers feel good about cottoning on to the in-jokes. In one, a man bear-hugged by an overaffectionate grizzly seeks help for a broken pelvis. Another reads: “Get a bright, articulate doctor to call you without having to join a dating site.”
The campaign was the work of Oscar, which bills itself as the first new health insurer in New York in 15 years and the only “tech-driven” insurance company in the country. Subscribers are mailed their membership cards in the same type of box as an iPhone and issued a profile that, à la Facebook, organizes medical information in reverse-chronological order. There is a search engine that accepts commonsensical queries (“My tummy hurts”) and Google Maps–based software that ranks in-network health providers in a person’s immediate area. If someone prefers to speak to a doctor directly, he can click on a link, and a professional will call him back in less than an hour.
The company launched last year and was founded by three business-school buddies: Joshua Kushner, brother of Jared, son of Charles, and the founder of the VC firm Thrive Capital; Mario Schlosser, a computer scientist and former McKinsey man; and Kevin Nazemi, a veteran of the health-care division at Microsoft. Although the trio says that Oscar would have come into being regardless of the political climate, its launch was purposefully timed to coincide with the rollout of the Patient Protection and Affordable Care Act, otherwise known as Obamacare—legislation that requires every American to have insurance or else pay a significant tax penalty and prevents insurers from denying coverage to anyone, regardless of preexisting conditions.
Before Obamacare, insurers sold the bulk of their plans through HR departments or licensed brokers. But the Affordable Care Act created a series of state exchanges, where you can compare various plans and purchase insurance directly. In New York, 16 companies compete on the exchange. Thirteen are deeply entrenched players, from Fidelis Care to WellPoint, the largest insurer in the state. One is the freshly founded nonprofit cooperative Health Republic. Another is North Shore–LIJ CareConnect, a provider-owned insurer. And then there’s Oscar.
The company has generally attempted to shill its plans, which are currently available only in the city and surrounding counties, the same way it might advertise a hot new piece of tech hardware. The boutique design firm Doberman was hired to help create a website; a series of cartoon shorts, starring the aforementioned bear and his pelvically compromised companion, was done in collaboration with the production company Hornet Inc. And in the run-up to the open-enrollment deadline, a pair of Obama 2012 operatives were brought onboard to oversee a canvassing campaign.
Meanwhile, with the help of VC cash—Peter Thiel’s Founders Fund alone ponied up $30 million—and a small army of engineers and site architects poached from Tumblr, Google, Facebook, and Spotify, Oscar has built an infrastructure that it brags is faster and more efficient than anything used by the big, publicly traded insurers. “There’s this joke that if you were blindfolded and brought to a health-insurance company, you’d think you were in a paper factory,” says Kushner, who has a propensity for talking in complete Zuckerbergian paragraphs. “We see a lot of inefficiencies. A lot of low-hanging fruit. We like to say, ‘Okay, what if we started over with a completely blank slate?’ ”
In a very real sense, Oscar is a harbinger of health care as it is likely to exist in the era of Obamacare: aggressively marketed, conspicuously consumerist, bristling with “functionalities” that digital natives understand and appreciate. Call it insurer-as-capital-B-Brand. “Not all of these companies are going to succeed,” says Charles P. Friedman, the director of the Health Informatics Program at the University of Michigan in Ann Arbor. “But even if they don’t, they will have brought a new spirit of disruption to the health-care field.”
Oscar’s headquarters in Soho is high-ceilinged and decorated in standard-issue start-up chic: white walls, esoteric European board games on the shelves, tangles of wire underfoot. On the day I visited, most of the senior employees were huddled around a long banquet table, with the middle-aged insurance guys at one end and the designers and coders at the other—a division referred to internally as the suits and the hoodies.