Obamacare startup faces losses
Oscar Insurance Corp., the Silicon Valley-backed healthcare startup, continued to lose tens of millions of dollars in the third quarter as the company exits some markets
Oscar Insurance Corp., the Silicon Valley-backed healthcare startup, continued to lose tens of millions of dollars in the third quarter as the company exits some markets and works to diversify away from its Obamacare business.
The New York-based company sells health insurance to individuals in new markets set up by the Affordable Care Act. Its attempt to reinvent the insurance business has been marked by large losses—in the third quarter, the closely held Oscar Insurance lost $45 million in New York, Texas and California, according to filings with regulators. That follows losses of $83 million in those states during the first six months of this year.
Even before the election win by President-elect Donald Trump, who has promised to repeal or amend Obamacare, the company was working to expand the types of insurance it sells while exiting some markets. About two-thirds of the losses this year are related to it building out its business and technology, including setting up a network of hospitals and doctors in New York, and preparing to sell insurance to small companies. The rest of the losses stem from high medical costs, said a person familiar with the startup’s finances and who asked not to be identified as the details are not public.
“From the start, Oscar’s mission was to build an end-to-end healthcare system that is designed to put the needs of consumers first,’’ Anne Espiritu, an Oscar spokeswoman, said in a statement.
“Our commitment has required meaningful, upfront investments as we put the necessary building blocks in place that position Oscar for long-term success.’’
Trump’s election could be a negative for the insurer.
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First Published:17 Nov 2016, 04:12 PM IST
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