Oscar, the $2.8 billion health insurance startup, is pulling out of some Obamacare exchanges.
According to a release from the company on Tuesday, the firm will no longer offer individual market plans through the Affordable Care Act in Dallas, Texas and New Jersey.
“But there are uncertainties in those two markets that will make it challenging for us to operate effectively and continue to deliver access to quality healthcare to all of our members across the country,” said the release.
“We hope to return to these markets as we carry on with our mission to change healthcare in the US.”
The company has set out to revolutionise the way that people get their health insurance by simplifying the offerings and making them easily accessible in their online platform. Despite the attempts at disruption, it appears to be facing the same challenges that largest insurance providers such as United Healthcare, Aetna, and Humana are facing in the ACA exchanges. All three of those companies have also rolled back a significant chunk of their Obamacare business this year.
In an interview with Bloomberg’s Zachary Tracer, Oscar CEO Mario Schlosser said that problems with the exchanges are forcing the firm to focus only on markets they are comfortable with.
“The individual market isn’t working as intended and there are weaknesses in the way it’s been set up,” Schlosser told Bloomberg’s Tracer. “We want to focus on the markets we understand well, we want to focus on the markets where we have our own model in place.”
Oscar currently covers 7,000 people in Dallas and 26,000 in New Jersey.
In the same release, the company said it still plans to expand its offerings to the San Francisco market in 2017. The firm also will continue to offer coverage in New York, San Antonio, Los Angeles, and Orange County, California.
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