Oscar Health may not yet have disrupted the health insurance industry as promised, but it has disrupted its own C-suite, the the insurtech announced Tuesday.
Oscar Health CEO and co-founder Mario Schlosser will step down from the top job next Monday and make way for former Aetna CEO and Chair Mark Bertolini, the company said in a news release. Schlosser will remain as president of technology.
Bertolini was CEO of Aetna from 2010 until 2018, when he departed after CVS Health acquired the insurer he also served as board chair starting in 2011. The industry veteran has been an Oscar Health advisor since 2021, according to the news release. Prior to joining Aetna, he held executive positions at Cigna, NYLCare Health Plans and SelectCare. Bertolini most recently was co-CEO of investment management firm Bridgewater Associates.
Schlosser and fellow founder Joshua Kushner launched Oscar Health in 2012, pitching it to investors and consumers as a modern, technology-enabled health insurance company that would bring innovation to the sector. Bringing in Bertolini—who helmed the kind of legacy company Oscar Health was supposed to displace—marks a significant shift.
“We share a fundamental philosophy that a critical component of changing healthcare is a truly innovative technology powering Oscar and the industry,” Schlosser said on during a call with investors Tuesday.
Bertolini confronts a company in need of a turnaround. Oscar Health has never turned a profit. The insurer endured a $610 million net loss last year, 6.8% worse than the prior year, and expects to lose $75 million to $175 million in 2023. Oscar Health executives have assured investors that profitability is on the horizon later this year.
Oscar Health has downscaled its business amid financial struggles. Last year, the company suspended new business for its +Oscar information technology services, effectively ended its Medicare Advantage line and halted enrollment in health insurance exchange policies in Florida, its biggest market for those products.
“We will take a fresh look at our technology platform with an eye toward building out our strategy for bringing more of our capabilities to the market over time,” Bertolini told investors Tuesday.
Insurtechs such as Oscar Health, Bright Health Group and Clover Health suffered a difficult 2022 as they continue to struggle to make money in the typically lucrative health insurance sector, which remains dominated by big, profitable players such as UnitedHealth Group, Elevance Health, Centene and Humana.
Investors responded favorably to the Bertolini hire. Shares rose 35% to $4.90 at market open Tuesday. Oscar Health shares debuted on the New York Stock Exchange at $39 in 2021.