Cigna+Oscar Small Group California Health Insurance

Cigna+Oscar was a combination of a relatively new medical insurance company (Oscar Health) and one of the oldest medical insurance companies (Cigna). The stopped offering coverage in California in 2025. The partnership was supposed to use the Oscar high-tech options for administration and uses the large Cigna PPO provider network. Cigna made a major investment in Oscar Health and this was more of an integrated partnership than Oscar Health had merely renting the Cigna provider network. As they describe the relationship: Cigna + Oscar is a joint venture providing fully-insured small group health insurance. This partnership is a 50/ 50 risk sharing arrangement between the two companies. (Source: Cigna+Oscar 2023 Small Group Plans Broker Sales Kit.)

Strengths

Price Competitive: In 2023 Cigna+Oscar was very price competitive for full network PPO plans when compared to all other insurance companies in California. Their rates were 10-15% less than Blue Shield or Anthem and more than 15% less than other insurance companies in some areas. Alas, these low rates were too good to last and they stopped offering any coverage in 2025.

Large Provider Network: In addition to this price advantage, Cigna+Oscar offered a very large network of PPO providers in their Open Access Plus network. A large provider network was a good thing. In-network medical providers had agreed to discount their fees, so that Cigna+Oscar members would pay less for medical services from these doctors and hospitals. The Open Access Plus Cigna+Oscar PPO network had many hospitals, doctors and other medical professionals and the number of medical providers is comparable to the other insurance company full-networks.

Low prices, a large provider network, and comparable benefits made this a good option for small business medical insurance in California. Unfortunately, this was not sustainable and they pulled out of the California small group market in 2025.

Challenges

No HMO option: Cigna+Oscar only offered PPO and EPO small group medical insurance plans. An EPO is an “Exclusive Provider Organization” which is like a PPO except that there is no out-of-network benefit. This means that on the EPO plan Cigna+Oscar would only pay for services from contracted doctors and hospitals in the EPO. If you use an out-of-network doctor or hospital, the insurance wouldn’t pay anything. This limitation only applied to the EPO. The PPO plans had an out-of-network benefit.

Because Cigna+Oscar did not offer an HMO, employees who had been on an HMO plan had to enroll in the Cigna+Oscar EPO plan. The EPO was similar to the HMO plans in that neither plan offered an out-of-network benefit.

Complaints about Authorizations: We had clients who had difficulty getting medical services authorized. Apparently, this was due to the fact that Oscar, who managed administrative services, outsourced the utilization review to a third party. The third party had difficulty verifying coverage for members. This resulted in horrible experiences for some members. We had a client who was waiting for surgery at the hospital and we had Oscar reps on the line with the Utilization Review third party but they could not verify coverage and the member had to reschedule the surgery: a bureaucratic nightmare.

Not Sustainable in the California Small Group Market: The combination of Cigna+Oscar was new and it turned out that the lower price could not last. The 2023 low Cigna+Oscar rates turned out to be “teaser” rates where they were low for a year then they had to increase rates upon renewal. California small businesses did get the benefit of lower rates for a year. The Affordable Care Act prohibits insurance companies from asking medical questions, so, when the Cigna+Oscar rates increased the next year, a California small business could easily change to a different insurance company without concern that some employees wouldn’t be eligible because of pre-existing medical conditions.