This Is Not Your Parents' Health Insurance

Oscar is not your typical health insurance company. The New York City startup — the first new health insurer in years — is run by veterans of many of Silicon Valley's biggest names. And the way the company's founders see it, your insurance should play a bigger role in your life — not just handling claims, but using technology to keep medical life organized.

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AUDIE CORNISH, HOST:

It's ALL THINGS CONSIDERED, from NPR News. I'm Audie Cornish. It's been years since a new, for-profit health insurance company launched in the U.S. The industry's dominated by large, established firms. But some young tech entrepreneurs in New York believe they can take on the big guys, offering plans on the New York Exchange. NPR's Dan Bobkoff has their story.

DAN BOBKOFF, BYLINE: The company is called Oscar, and its headquarters is pure tech startup. Office dog? Check. Guys writing computer code next to half-eaten takeout? Yep. Ping pong tables nearby. Most of the staff sits around a long table in the center of the office. Most seem about 30, and come from some of the biggest names in tech.

MARIO SCHLOSSER: This is Tom here, formerly from Facebook. What's up, Tom?

BOBKOFF: Co-founder Mario Schlosser is showing me around.

SCHLOSSER: So Naveen, here, founded Foursquare. He's...

BOBKOFF: One came from the music service Spotify; another, from Google. And they're here to work for a health insurance company - unsexy, unglamorous insurance.

JOSHUA KUSHNER: We only live once.

BOBKOFF: Twenty-eight-year-old Josh Kushner is another of Oscar's three co-founders.

KUSHNER: Why, you know, build a toy on your phone when you can actually, directly impact an industry that needs to be changed?

BOBKOFF: And this is the idealistic pitch - that a bunch of outsiders whose backgrounds are mostly in tech, and a few from the insurance industry, can create a friendlier, easier and more understandable health care company.

KUSHNER: Insurance companies have done everything they can to acquire customers but soon after, everything they can to avoid them.

BOBKOFF: Oscar wants to be a big part of its customers' lives - keeping track of their medical histories, reminding them to take care of themselves and refill prescriptions. If you're feeling sick, Oscar wants you to start at its website. The technologists are working on a search box for you to tell it how you're feeling, in normal language. And Schlosser says it gives you suggestions and connects you with a doctor.

SCHLOSSER: Look what he just typed in: I'm feeling angry and I'm having nightmares. What are you getting?

UNIDENTIFIED MAN: Mental disorder is still No. 1. I'm trying to fix that.

BOBKOFF: Its doctor-search engine lets you search by location and by doctor's age, experience, medical school, and whether she treats patients like you.

KUSHNER: Which in this case, for the most part, means patients who are, you know, my age range.

BOBKOFF: Log in to the site, and there's like a Facebook newsfeed of your medical life.

KUSHNER: The visits you've had to the doctor, or the visits you've had to a hospital. Whenever you had a visit, we give you very detailed information as to what you paid and what we are paying.

BOBKOFF: Need a hip replacement? The map will show all the doctors in network that will do it, and how much each charges for the procedure so its customers can comparison shop. Important, since so many individual plans, including Oscar's, have high deductibles. Oscar is not competing on price. Its plans are neither the cheapest nor most expensive. It's hoping it's different enough from its competitors that it has an edge. And it hopes its selling points are features that save customers money, save Oscar money, and maybe improve care.

For instance, Oscar lets its customers call a doctor any time of day to ask about anything; great when you have a strange rash at 2 a.m., but don't want to go to the ER. Regina Herzlinger, of Harvard Business School, specializes in health care innovation.

REGINA HERZLINGER: So that sounds kind of fluffy, but the reality they use - if you can keep somebody out of the emergency room who shouldn't be there, you've not only reduced costs, but you keep that person out of sitting next to somebody who's been shot by an Uzi.

BOBKOFF: She says the industry has been ripe for some new company to try to shake things up. And she says the Affordable Care Act makes it possible for a new entrant like Oscar to compete because its plans are shown on the exchanges right next to the big brands. But Herzlinger says Oscar doing things a new way is encouraging, but also a potential liability.

HERZLINGER: Well, they're techies so health insurance is a very complicated industry. We've seen where techies have failed, crashed and burned disastrously in the past few months, in the exchanges.

BOBKOFF: For now, Oscar is focusing on getting up and running in the New York metro area. But it has long-term ambitions to go national. The question is whether customers want their health insurer to look more like Facebook than Blue Cross Blue Shield.

Dan Bobkoff, NPR News, New York.

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