Bright Health; Alex Wong/Getty; Clover Health; Oscar Health; Shayanne Gal/Business Insider
- A crop of health insurance startups — Oscar Health, Devoted Health, Bright Health, and Clover Health — have raised a combined $1.3 billion in the last year to use technology to build new kinds of health-insurance plans.
- We took a look at expansion plans and first-quarter 2019 financials for the four startups.
- The financial results were mixed, with some of the startups posting profits right off the bat and others posting losses, financial filings show.
- The filings and other reporting by Business Insider shed light on the companies’ plans to start selling their health insurance in more areas of the US.
- Visit Business Insider’s homepage for more stories.
Health insurance startups just came out with their first-quarter financial results for 2019.
The startups are taking on some of the biggest companies in the US, like UnitedHealth Group and CVS Health. They’re trying to get a foothold in massive insurance markets, with the bet that technology can help them provide better care to their members.
Business Insider looked through regulatory filings of four startups — Oscar Health, Devoted Health, Bright Health, and Clover Health — to get a sense of how the startups fared. Devoted’s results were the the first financials since the company launched health plans at the start of 2019 in Florida.
The results were mixed, with Oscar and Bright reporting profits and Devoted and Clover posting losses. Bright Health’s enrollment more than doubled, while Oscar and Clover also increased their membership, but at a slower clip. The startups mainly sell health insurance to individuals in the Affordable Care Act’s markets and to seniors in the form of Medicare Advantage health plans.
The filings also reveal the startups’ plans to expand their geographic footprints in the coming years.
The companies have been raising funds from investors to support their growth. In August, Oscar Health raised $375 million from Alphabet as it gears up to get into the Medicare Advantage market in 2020. Devoted Health in October raised $300 million in a round led by Andreessen Horowitz ahead of launching its first Medicare Advantage plans in Florida in 2019.
Bright Health, a Minneapolis startup that provides individual and Medicare Advantage plans, in November raised $200 million. Clover Health in January raised $500 million in a round led by Greenoaks Capital.
The slides below have more information about each company’s funding, financials, and expansion plans.
Bright Health is planning a major expansion into 5 new states.
Courtesy Bright Health
Minnesota-based Bright Health is showing no signs of slowing down.
Founded in 2016, Bright Health provides health plans for individuals under the Affordable Care Act and to seniors in Medicare Advantage.
The insurer is currently in its third year of offering plans.The company had made its way into six states as of 2019 and is laying plans to operate in five more as soon as next year, according to job listings and regulatory filings reviewed by Business Insider.
The new states are: Illinois, Georgia, Florida, South Carolina, and Nebraska.
In the first-quarter of 2019, Bright Health generated a net gain of $15.3 million. The company made $66 million in revenue and recorded $39.6 million of medical claims.
Its membership more than doubled between 2018 and 2019. As of the end of the first quarter, it had 65,886 members, the majority of which were in the company’s ACA health plans for individuals and families.
Clover Health saw its financial losses narrow.
Courtesy Clover Health
For the first quarter of 2019, Clover’s financial losses narrowed.
Clover lost $9.3 million, according to state insurance filings reviewed by Business Insider, down from the $14.7 million the company lost in the first quarter of 2018. The company sells private health-insurance plans for seniors, a market known as Medicare Advantage.
Clover generated $115 million in revenue across its health plans in seven states. The company paid out $109 million in medical expenses for its customers over the quarter, or about 95% of the premium revenue it took in, similar to its results from 2018.
The company recruited more members in 2019. Clover had 40,137 Medicare Advantage members at the end of the first quarter, up from 32,425 at the end of 2018.
It’s already been a big year for Clover. In March, the company said it was laying off 25% of its workforce, or about 140 employees, as part of a restructuring. That came on the heels of Clover raising $500 million in January, bring the total funds the company has raised to $925 million.
Clover got its start selling Medicare Advantage plans in New Jersey, which remains the company’s main market. The company also operates in Pennsylvania, Texas, Tennessee, Georgia, South Carolina, and Arizona. It’s still unclear whether Clover will enter new markets in 2020 and a spokesman for the company declined to comment.
Oscar Health is looking to get into Philadelphia, as well as Illinois and Georgia.
Photo by Amber De Vos/Patrick McMullan via Getty Images
Oscar Health has been offering health plans since 2014, amassing a national presence and hundreds of thousands of members. The company mainly sells health insurance to individuals in the markets created by the Affordable Care Act.
For 2019, Oscar offered health-insurance plans in nine states: Arizona, California, Florida, Michigan, New Jersey, New York, Ohio, Texas, and Tennessee.
Oscar has said that it’s planning to offer a new type of health insurance as well. In 2020, Oscar will start offering Medicare Advantage plans. The company hasn’t yet said where it will sell those plans.
Oscar in May provided reporters with a summary of its financial results for the first quarter of 2019. The company said it took in $354 million in gross premium revenue, and that it generated a gross underwriting profit of $82 million. The company said it spent about 70% of its members premium dollars on medical care.
The figures that Oscar provides are adjusted to account for a reinsurance agreement with insurance giant Axa.
According to the filings reviewed by Business Insider, Oscar posted a net profit of $24 million in the first quarter of 2019.
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