Tweet This
Health insurance startup Oscar Health said its financial losses are narrowing ahead of a major expansion into small business coverage and into new markets selling individual products under the Affordable Care Act.
Oscar on Thursday reported a $96 million third quarter loss across Texas, New York and California markets where it sells coverage in the company’s third quarter. It was an improvement from a loss of $128 million in the third quarter of last year.
But Oscar said its underwriting profits are improving. Oscar reported a $4 million underwriting profit through the third quarter compared to a $36 million loss at the same time last year.
Given losses and the sicker-than-expected population of patients signing up for coverage, Oscar’s improving underwriting profits are significant to the company’s future success.
“Building the first technology-driven, full-stack health insurer is a bold, ambitious investment over time and this quarter’s underwriting profit represents a $40 million improvement from last year,” Oscar Health said in a statement accompanying state financial filings released for California, Texas and New York. “As we look towards 2018, we are confident that our expansion to 6 states, partnerships with Cleveland Clinic and Humana, and continued development of our product and technology vision put us on strong footing.”
Earlier this year, Oscar announced plans to offer co-branded individual insurance in Ohio with the Cleveland Clinic in five northeastern counties in that state. Its other new markets for 2018 include Austin, Texas, where it has individual products already in San Antonio.
Oscar was co-founded by Mario Schlosser and Josh Kushner, the brother of President Trump’s son-in-law, Jared. The two are ratcheting up marketing and expansion in 2018, which could be a critical year for the company.
Inside Obamacare: The Fix For America’s Ailing Health Care System explores the ways the Affordable Care Act will impact your health care.
Oscar’s technology will be used by Humana to offer small businesses health plans in a nine-county area that includes Nashville, Tenn. The New York-based startup, which made a name for itself by launching individual products on public exchanges under the Affordable Care Act, launched Oscar for Business in April.
Oscar Health is also returning to New Jersey to sell individual health plans on public exchanges under the ACA.
Oscar is expanding at a time larger players like Aetna, Anthem, Humana and UnitedHealth Group scale back their Obamacare business. The larger players are scaling back or leaving the individual business after being unable to successfully manage the costs of sick patients signing up for coverage.
