Of all the industries for a startup to tackle, health insurance may be one of the toughest. Cumbersome state and federal regulations, powerful suppliers such as hospitals and a market dominated by big corporate customers combine to favor big incumbents. Oscar Health Insurance, a venture-backed East Coast startup launching in California next month, is hoping to prove that theory wrong.
After two years in operation, the financial trajectory is becoming clear, both in terms of the growth and the costs. In New York, the company projected a sevenfold increase in premium revenue next year to $399 million from 2014. But it also projects a loss of 12% of premiums, equivalent to $47 million, according to regulatory filings.