Updated Mar 29, 2018

Behind Oscar's financial numbers

Oscar raised $165 million in new funding but is still hemorraging cash. Photo: Oscar

In announcing a new $165 million cash injection, the co-founders of Oscar Health Insurance said the startup had made an "underwriting profit" in 2017.

Reality check: There's a lot of wiggle room in "underwriting profit," based on Oscar's own financial data. Oscar's core insurance functions are still in the red — which will have to turn around if the company also continues to spend more money on its health technology.

Behind the numbers: We looked at Oscar's 2017 financial documents in March; they showed a net loss of $127 million on $229 million of revenue in 2017. That includes overhead and administrative costs, like salaries, advertising, technology and keeping the office lights on.

Oscar calculating its underwriting profit by subtracting medical costs from premium revenues and adding in reinsurance money for high-cost claims, according to company spokesman Khan Shoieb. Using that measure, Oscar's gross margin was roughly break-even.

  • Before adding in reinsurance, though, the company lost more than $50 million last year.
  • Despite a few rocky years, many of Oscar's competitors in the Affordable Care Act's exchanges are turning a profit even without reinsurance — just from the balance between premium revenues and expenses. Other experts I contacted agreed that Oscar's situation is far from rosy.

The big picture: Many startups are unprofitable as they make investments in technology and elsewhere, but Oscar has to find a path to profitability somewhat soon.

  • State insurance departments require insurers to have enough money to cover their operations (so they don't go under and leave people uninsured). It's not feasible to rely on large funding rounds by outside investors who will eventually want their money back — and then some.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 1 p.m. ET: 691,867 — Total deaths: 32,988 — Total recoveries: 146,613.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 1 p.m. ET: 125,433 — Total deaths: 2,201 — Total recoveries: 2,612.
  3. Federal government latest: The first federal prisoner to die from coronavirus was reported from a correctional facility in Louisiana on Sunday.
  4. Public health updates: Fauci says 100,000 to 200,000 Americans could die from virus.
  5. State updates: Louisiana governor says state is on track to exceed ventilator capacity by end of this week — Cuomo says Trump's mandatory quarantine comments "really panicked" people
  6. World updates: Italy reported 756 new deaths, bringing its total 10,779. Spain reported almost 840 dead, another new daily record, bringing its total to over 6,500.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Cuomo: Trump's mandatory quarantine comments "really panicked people"

New York Gov. Andrew Cuomo said in a press conference Sunday that President Donald Trump's unexpected Saturday announcement of a possible "short-term" quarantine of New York, New Jersey and parts of Connecticut to curb the spread of the coronavirus "really panicked people."

Why it matters: Though Trump ruled out the mandatory quarantine later that day, Cuomo said people still called "all night long" asking about the comments and many likely fled the New York area — possibly spreading the virus further.

U.S. coronavirus updates: Fauci suggests death toll could top 100,000

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said on CNN Sunday that models suggest COVID-19 will infect millions of Americans and could kill 100,000–200,000, though he stressed that the projections are "a moving target."

The big picture: With more than 121,000 people infected, the U.S. has the most COVID-19 cases in the world, exceeding China and Italy, per data from Johns Hopkins. A second wave of American cities, including Boston, Detroit, New Orleans and Philadelphia, reported influxes of cases on Saturday.

Go deeperArrowUpdated 2 hours ago - Health