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Eliminating employer-sponsored health insurance would help defuse frustration over the U.S. health care system, the former CEO of Aetna said.
“Probably the most important thing is that health care has now become very individualistic: ‘I want it to be fit for me,’” Mark Bertolini, now the CEO of Oscar Health, told CNBC “And when my employer buys my health care coverage, they buy for the average.”

His comments come as his company seeks to expand in the Individual Coverage Health Reimbursement Arrangement market, industry observers point out. Although employer-sponsored health insurance covers more than 160 million Americans, Oscar has positioned itself to target individuals uninsured by their employers.

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The recent murder of UnitedHealthcare CEO Brian Thompson has spurred intense debate about the U.S. health care system. "While the act in itself is unconscionable, the behavior of the American public, and reaction to it, is understandable given how frustrated people are at the state of our health care system in the United States," Bertolini said. “You can't talk to anyone in this city and not get a story about a claim denial or a prior authorization … getting the right drugs.”

Insurance premiums for enrolled employees increased an average of 50%, from $4,940 for single coverage in 2010 to $7,590 in 2022, according to the U.S. Census. Bertolini also argues that relationships between insurers and physician practices tighten following mergers. Employers no longer have the same bargaining power against insurance providers to lower premiums, and that power of negotiation only diminishes for small-and mid-sized firms. “The companies have no leverage,” he said.

Oscar Health partnered with Cigna in 2020 to provide group insurance to small-and mid-sized businesses and gain access to its provider network. However, it has struggled to sustain that branch of its business and has redoubled efforts to expand coverage to employees to compete with the larger firms from which employers seek coverage.

Bertolini proposed that employers continue to contribute to employees’ insurance, but instead of enrolling them in a group plan, allow them to select an individual plan that fits their needs. A relatively younger and healthier employee, for example, should get a lower premium than older colleagues who have a large family. “Instead of defined benefit, you allow that employee, with some assistance, to understand what's going on in their use of health care to get them into the right plan,” he said.

Oscar Health reported $54 million in losses last quarter, shortly after the election. Although Donald Trump has proposed scrapping the Affordable Care Act, the company said in a statement accompanying its earnings report that it is “positioned for long-term growth -- appealing to GOP desires for consumer choice and a free-market approach.”

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Alan Goforth

Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.