The Future of Oscar Health and the Implications of Trump Cancelling Obamacare

Introduction

With the ongoing discussions about healthcare reform in the United States, particularly the potential repeal of the Affordable Care Act (Obamacare), questions have arisen about the future of companies like Oscar Health. Founded by Josh Kushner, the brother of Jared, this insurance company faces unique challenges and opportunities in the shifting healthcare landscape.

Impact of Obamacare on Oscar Health

It is important to note that the future of Oscar Health is not significantly tied to the existence of Obamacare. As a relatively early-stage venture, Oscar Health has the flexibility to pivot its business model based on changes in healthcare policy. However, the company's current financial situation and long-term survival are closely intertwined with venture capital funding.

Despite the potential for changes in healthcare policy, it is crucial to understand that canceling Obamacare is not as straightforward as it might seem. Trump cannot simply cancel it; Congressional action would be required.

Fiscal Challenges for Oscar Health

In 2015, Oscar Health faced significant financial challenges, particularly in its flagship markets of New York and New Jersey. Multiple news sources reported that the company lost over $105 million in these key markets, with New York serving as its headquarters. This financial loss highlights the company's struggles even in its early years and its dependency on venture capital.

The company is currently grappling with the challenges of operating in a crowded market where numerous established health insurance companies already have significant data and expertise in actuarial science. This competition is likely to intensify if changes in healthcare policy impact the overall landscape.

Proprietary Business Model?: A Critical Analysis

One of the key concerns regarding Oscar Health's future is the lack of a proprietary or protectable business model. In the highly competitive health insurance industry, achieving profitability is a significant challenge. Most large commercial health insurance companies struggle to maintain a net profit margin higher than 5%, a feat that they have been working towards for years.

Given the intense competition and the fact that Oscar Health's business model is not uniquely proprietary, the company faces an uphill battle to sustain its operations in the long term. If the appetite for investing in this business model wanes, as it might due to changes in healthcare policies, the future prospects for Oscar Health could be uncertain.

Conclusion

While the potential repeal of Obamacare by Trump is a significant development in the healthcare landscape, it is important to recognize that the future of companies like Oscar Health is complex and cannot be predicted solely based on policy changes. Financial challenges and competition from established players present significant hurdles that Oscar Health must overcome. For now, the company remains in a precarious position, but its ability to adapt and pivot its business model may ultimately determine its long-term success.

References

Startup Oscar Posts 105 Million Obamacare Loss in 2015