“Probably the most important thing is that healthcare has now become very individualistic: ‘I want it to be fit for me,’” Bertolini told CNBC’s “Squawk Box” on Thursday. “‘And when my employer buys my healthcare coverage, they buy for the average.’”

Bertolini has led Oscar Health since April 2023, after VC Joshua Kushner co-founded the company in 2012. Kushner has served as vice chairman of the board since its founding. The insurance company is an individual health care provider under the Affordable Care Act (ACA) and has continued to expand its availability in the marketplace for those who aren’t getting employer-covered insurance. While Oscar partnered with Cigna in 2020 to provide group insurance to small-and mid-sized businesses and gain access to its provider network, 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.

More than 60% of Americans under 65, or about 164.7 million people, were insured through their employer in 2023, making it the largest source of insurance for non-senior Americans, according to health policy nonprofit KFF. The system has allowed a wide swath of Americans to receive subsidized health insurance, and for their employers to save money through tax breaks by providing group health coverage. 

But the system can also result in uneven coverage and massive variability in what employees need to contribute to the plan, with insurance premiums for enrolled employees increasing by more than 50% on average from $4,940 for single coverage in 2010, to $7,590 in 2022, according to the U.S. Census. As the cost of care in the U.S. balloons, making up almost 20% of the gross domestic product, the system as it stands is growing less sustainable.

Bertolini argues that relationships between insurers and physician practices tighten in 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.

As an alternative, the healthcare CEO 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 their older colleague who has a large family.

“Instead of defined benefit, you allow that employee, with some assistance, to understand what’s going on in their use of healthcare to get them into the right plan,” Bertolini said.

Bertolini is effectively describing Oscar’s $3.4 billion business model. The marketplace-based insurance company reported $54 million in losses last quarter, shortly after the election. Though Donald Trump has proposed scrapping the ACA, the company said in a statement accompanying its earnings it is “positioned for long-term growth—appealing to GOP desires for consumer choice and a free market approach.” 

Oscar did not respond to Fortune‘s request for comment.

Changing an 80-year-old insurance model

The desire to reinvent the insurance industry comes amid a wash of criticism of the U.S. healthcare system in the wake of Thompson’s death, which precipitated death threats to other healthcare executives and the removal of senior executive and board member information from insurers’ websites to protect employees’ safety 

But “the anger is justified,” Bertolini said, particularly as rates of claims denials have increased, according to Experian Health’s 2024 State of Claims.

“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,” Bertolini added.

These frustrations have been 80 years in the making, he said, and are a result of a system built after World War II to accommodate a growing economy and population. It no longer suits today’s population, in his view. 

In the early 19404s, having so much of the U.S. population in military service caused a severe labor shortage, and in order to entice the remaining eligible population to join the workforce, employers began hiking wages. Fearing a wave of inflation as a result of the hiring push, President Franklin Roosevelt created the Office of Economic Stabilization and authorized wage controls through the Stabilization Act of 1942. The move forced employers to instead use increased health insurance benefits as an incentive. To accommodate the growing number of Americans receiving health care through employee-provided insurance, Congress passed the Hill-Burton Act in 1946 to build and expand U.S. hospitals. 

“We created both demand and supply increases that have not slowed since the population boom happened,” Bertolini said. The problem now is that in 1940, health care spending made up 4.5% of the GDP compared to today’s nearly 20%.

“As you look at these changes over time,” he added, “we’ve just outrun our ability to afford the way we do it.”