Clover Health, a $1.2 billion startup backed by Alphabet, is still losing money - but less than it was before

Courtesy Clover Health

Clover Health CEO Vivek Garipalli

• We just got a look at the third-quarter financial results for Clover Health, an Alphabet-backed health insurance startup valued at $1.2 billion.
• Clover sells Medicare Advantage plans. According to New Jersey insurance filings reviewed by Business Insider, Clover posted an $18.7 million loss through the first nine months of the year.
• Clover previously told Bloomberg in March that it expects to generate $330 million in revenue for the entirety of 2018. Through the first nine months, it's generated $223 million.

We just got a look at how healthcare startup Clover Health is doing through the first nine months of 2018.

Clover lost $18.7 million in the first nine months of 2018, according to a state insurance filing reviewed by Business Insider. The company offers private health insurance plans for seniors, a product called Medicare Advantage.

The results put it in better shape than it was in in 2017, when it posted a net loss of $31.6 million through the first nine months of the year, according to the filing. By the end of 2017, it reported a $21.5 million loss in its business in New Jersey.

The insurer currently operates in New Jersey, Pennsylvania, Texas, and Georgia, and is expanding to more states in 2019, including parts of South Carolina, Arizona, and Tennessee. Business Insider reviewed filings from New Jersey, which makes up the majority of Clover's business now.

Other notable figures from the first nine months:

• Clover's revenue in New Jersey was $223 million.
• The company paid out $204.9 million in medical expenses for its customers.
• Clover had 31,902 Medicare Advantage members as of September 30.

Bloomberg in March reported that Clover expected 2018 revenue to hit $330 million in 2018. For the full year of 2017, the company generated $267 million in revenue.

Clover's New Jersey Medicare Advantage plan currently has a three star rating out of five from the government, down from 3.5 in 2017. That reduces the amount of money the government will pay Clover for insuring seniors.

Clover Health sells Medicare Advantage health insurance plans. When seniors in the US turn 65, they can choose to be part of either traditional Medicare or Medicare Advantage, which is operated through private insurers like Clover and often provides additional healthcare benefits. The hope for San Francisco-based Clover and other technology-based health insurers is to use data to improve patients' health.

The Medicare Advantage market is highly competitive. Oscar Health, another Alphabet-backed insurer, is planning to enter the Medicare Advantage market in 2020. In October, investors poured $300 million into Devoted Health, another startup planning to launch Medicare Advantage plans in Florida in 2019.

Read More: We got the first look at Oscar's financials since Google's parent company made its $375 million investment - and the health insurer's losses are narrowing

Clover, Devoted, and eventually Oscar are going up against healthcare giants that have been entrenched in the market like Humana, UnitedHealth Group and soon-to-be-merged CVS Health and Aetna. Those companies tend to generate substantial profits from Medicare Advantage.

In January, CNBC reported that Clover had hit some rough patches, including upsetting members who faced unexpected bills, and missing financial targets.

Founded in 2014, the company most recently raised $130 million in May 2017 from investors including Alphabet's venture arm GV at a $1.2 billion valuation. In total, the company has raised to $425 million.

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