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Florida Blue Faces Antitrust Lawsuit From Oscar Health

Nov 13, 2018

A health insurance provider that started selling plans on Florida’s Affordable Care Act marketplace this year is suing the state’s largest insurer.

Oscar Health claims Florida Blue is creating a monopoly with a policy that restricts health insurance brokers from selling competitors’ plans.

New York-based Oscar entered the Orlando market this year and made arrangements with insurance brokers to sell the Affordable Care Act plans starting on Nov. 1.

Some of the plans are cheaper than the same plans offered by Florida Blue, according to the lawsuit. Florida Blue responded by telling brokers they would not be allowed to sell its plans if they also sold plans offered by Oscar, according to the lawsuit.  

“If you want to sell Florida Blue individual, you can’t sell anyone else,” said Joel Klein, chief strategy and policy officer for Oscar Health.  “And only a monopolist would be able to do something like that because they have so much market power.”

Nearly 200 brokers backed out of agreements to sell Oscar’s plans, Klein said.

“It was a real use of economic power to coerce the brokers not to be able to sell the products to their clients,” Klein said. “As a result the clients were getting only one product and didn’t even know about the alternative, which is a better cheaper product.”

Oscar, which sells plans in eight other states, had not encountered the practice before, Klein said.

The company is suing Florida Blue under antitrust laws in Florida and the United States. They’ve asked the judge to stop the practice.

Florida Blue spokeswoman Christie DeNave responded with a statement that said Oscar Health has 1,600 agents in the state that can sell its insurance, which should be enough. Exclusive arrangements in the insurance business have been used for years, DeNave said, and agents are independent contractors who can choose whether or not to work on an exclusive basis.

But Klein said Florida Blue has restricted the agents with the most clients.

Oscar, which is known as a patent-centered, technology-driven company, provides free telemedicine to all clients 24-hours a day and a personalized concierge team to connect patients with care.

According to its lawsuit, Oscar’s plans in the most popular Affordable Care Act categories cost consumers $190-$430 less per year than comparable Florida Blue Plans.

Oscar intends to expand into other Florida markets, including Tampa, Jacksonville and Miami.