Despite repeal of the Affordable Care Act’s individual mandate this week, health insurance startup Oscar Health expects to gain to pull in nearly $1 billion in revenue and enroll a quarter of a million members in 2018.
That’s quite a feat for the insurance company meant for the digital age. The company is only in its fifth year of operation and owes much of its success to the ACA, quickly vaulting the company to a $2.7 billion valuation by 2016.
The newly disclosed prediction is based on open enrollment numbers so far, according to the company. Though open enrollment was cut short this year, ending December 15th for 39 U.S. states, New York and California are still enrolling until January 31st of next year.
So far, Oscar Health says it has seen a 150 percent uptick in enrollments for 2018, compared to the previous year and expects to hit that 250,000 number if it stays on track.
“This was a year in which Americans tuned out headlines and proved that a stable, core group of consumers make up most of the market,” Oscar Health CEO Mario Schlosser said. “As we pursue our mission to deliver quality, affordable care to everyone, Oscar is charting an exciting growth trajectory in a resilient individual market.”
Still, the individual mandate hasn’t been as lucrative as hoped for several insurance outfits, including Oscar. The startup reportedly lost $128 million in the first three quarters of 2016 and was down $105 million in 2015.
Those digits have so far not bothered Oscar as it plows forward. “The impact of mandate repeal is expected to vary on a market by market basis, and we don’t expect it to significantly impact growth projections — fact that we were successful this year even as nat’l market contracted is an indicator that we have a business model and a product that is attractive and in-demand,” a company spokesperson told TechCrunch.
Earlier this year, Oscar Health started expanding out of the individual plans by rolling out a product for small businesses called Oscar for Business. The $1 billion revenue target may have something to do with that expansion or an overhaul in markets and pricing structure.
Oscar Health confirmed some of this, telling TechCrunch it’s a combination of membership growth in existing markets, expansion into new markets and premium revenue growth. The projected $1 billion is up over $300 million in 2017 premium revenue.
Whatever the case may be, those numbers put Oscar Health’s insurance underwriting business in the black for the first time, though it still needs to work on profitability in the overall business.