New York City-based startup Oscar Health posted a $45 million loss in its New York, Texas and California ACA individual plan markets in the third quarter of fiscal year 2016, reports Bloomberg.
The deficit trails $83 million in losses the insurer recorded in the same states during the first half of 2016. While Oscar's year-to-date loss does not include its New Jersey market, the insurer is set to surpass its FY 2015 net loss, which was about $105 million.
The majority of Oscar's 2016 losses stemmed from expansion of its business and technology — including establishing a network of New York hospitals and physicians, working to sell small group insurance by mid-2017 and high medical costs, according to the report.
President-elect Donald Trump's proposal to repeal or amend the ACA could hold clout over the insurer's diversification into the small business market, as the majority of its business is on ACA exchanges. Oscar's diversification efforts include creating narrow networks in New York, Los Angeles and San Antonio markets, as well as exiting ACA exchanges in Dallas and New Jersey and entering the San Francisco market. Oscar will also transfer its New York City operations to a new office in Tempe, Ariz.
Despite the losses, Joel Cutler, a managing director at General Catalyst Partners, told Bloomberg Oscar is well-positioned and "has quite a substantial amount of capital and is extremely well-focused on the consumer in an industry where that's hard to do."