We got a look at $3.2 billion Oscar Health's latest financials and enrollment numbers, and they show why 2020 will be a crucial year for the startup insurer

Lydia Ramsey

Mar 4, 2020, 00:15 IST

We got a look at $3.2 billion Oscar Health's latest financials and enrollment numbers, and they show why 2020 will be a crucial year for the startup insurer

Tom Werner / Getty Images

Oscar Health is planning a big expansion for 2020.

We got a look at Oscar Health's financials for 2019.
Oscar posted a net loss of $110 million, a deeper loss than the $57 million loss the company posted in 2018.
Oscar's planning a big expansion for 2020, expecting to hit $2.2 billion in gross revenues, up from $1.3 billion in 2019.
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The buzzy insurance startup Oscar Health is looking to almost double its revenue in 2020, after a more subdued 2019.

Oscar brought in $1.3 billion in gross premium revenues in 2019, up slightly from 2018. It expects to bring in $2.2 billion in gross revenues for 2020 after a massive jump in membership.

The membership growth sets up a critical test for a health insurer that has yet to turn a profit. Oscar has raised more than $1 billion from investors enticed by its promise of a new tech-driven approach to health insurance, including Google's parent company, Alphabet.

The health insurance startup sells coverage on the individual exchanges set up by the Affordable Care Act, to small businesses, and starting this year to seniors through Medicare Advantage plans.

Oscar's 2019 financial results

Oscar's financials are affected by two reinsurance deals. Fifty percent of Oscar's revenues now get passed along to Berkshire Hathaway, while insurance giant Axa gets about half of the remaining revenue, the company said as part of its second-quarter financials.

Accounting for those reinsurance agreements, Oscar brought in $494 million in net revenue in 2019 and paid out $418 million in medical claims. That's about 85% of the premium revenue it took in from its members, otherwise known as the medical loss ratio. Insurers aim to pay out less in medical expenses than they take in in premiums, in order to turn a profit.

Oscar's net losses grew in 2019 to $110 million, a steeper loss than the $57 million net loss the company posted in 2018. The company cited the investments it's making in building the company as a contributor to the increased losses in 2019.

Growing the business in 2020

Going into 2020, Oscar's total enrollment increased by 63% to 420,000, from 257,000 at the start of 2019.

"This has been our most successful open enrollment in the company's history," Oscar CFO Sid Sankaran told Business Insider.

That's in part because of the growth Oscar saw in some of the markets it had been in for at least a year.

"As we enter a market, what we see is we steadily grow share in that market over time," Sankaran said. He pointed to Orlando, Florida, a market Oscar entered in 2019. It's grown from 30,000 members in 2019 to 40,000 members in 2020, Sankaran said.

Shayanne Gal/Business Insider

Oscar's enrollment figures include a small number of Medicare Advantage members who signed up when the company began selling those plans in New York and Houston for this year. As of the start of 2020, Oscar had about 1,500 members between those cities.

Sankaran said that enrollment was in line with Oscar's expectations and noted it was among the top five new Medicare Advantage entrants in 2020, according to a Nephron Research report reviewed by Business Insider.