Oscar Insurance reports lower losses in Q1 versus last year
Oscar Insurance lost $25.8 million in the first three months of 2017, which is much less than the $48.5 million it reportedly lost in the first quarter last year, Bloomberg reported. The company is said to have lost nearly $21 million in New York, about $2 million in Texas and almost $3 million in California.
The insurer made strategic changes for 2017, including increasing premiums, leaving New Jersey and parts of Texas, limiting its network offerings in New York and opening a primary care clinic in Brooklyn, NY late last year.
The New York-based company is positioning itself to upend the traditional norms of what an insurer is via technology, such as data-driven insurance products for customers and in-network scheduling assistance. Another data-driven insurer, Clover Health, recently was valued at $1.2 billion, making it one of the newest unicorn companies.
The healthcare industry is watching Oscar closely as it is one of a small number of health insurance start-ups focused on technology with the customer in mind.
No company wants to lose money, but Oscar has shortened the gap. In addition, while payers fret about what Congress may or may not do with healthcare reform, Oscar officials say the company is adaptable and can change gears if Congress repeals the ACA.
The insurer, which was created to sell Affordable Care Act (ACA) plans, operates in three states – New York, California and Texas. Oscar had 90,171 members as of March 31, which is a drop from 106,000 last year.
Clover Health, which serves Medicare Advantage beneficiaries in New Jersey, recently noted it lost $34.6 million in 2016, which is seven times more than it lost in 2015. It covered 20,600 members in 2016, which was a huge increase from 7,200 members in 2015. Clover Health is currently planning to expand beyond it's New Jersey market.
On one hand, it takes money to make money and starting a company is not cheap, especially when tackling the insurance industry. Plus, Clover Health can boast Alphabet's venture arm GV as an investor while Oscar can cite CaptialG (which began as Google Capital) and investors alongside that include Joshua Kushner’s Thrive Capital, Founders Fund, Fidelity Investments and General Catalyst. In Clover Health's case, their GV colleagues include such companies as One Medical Group, Uber and Flatiron Health while Oscar's CapitalG cohorts include Airbnb and Glassdoor.
As these companies explore their separate insurance markets (individual insurance for Oscar, Medicare Advantage for Clover Health), it will be critical to watch how the data-driven insights and consumer-focused initiatives affect their respective markets. The big question would then be: Are these efforts scalable?
- Bloomberg Obamacare Insurer Oscar's New Strategy Helps to Narrow Loss
- Fierce Healthcare How data restructured Oscar’s approach to marketplace plans—and why that might be bad for the industry in the long run
- Healthcare Dive Oscar looks beyond the ACA for business
- Healthcare Dive Medicare Advantage payer Clover Health suffers financial losses