Oscar Health is headed back to New Jersey and branching out to Ohio and Tennessee tcdisrupt ny17 8790

Oscar Health seems to be expanding rather than shrinking in the next year. Despite worries that the Affordable Care Act wasn’t working out for health insurance companies, Oscar has filed to expand in 2018, adding the states of Ohio and Tennessee, expanding in Texas and California and heading back to New Jersey, where it pulled out at the beginning of this year.

Some of the expansion has to do with Oscar’s new small business product, Oscar for Business. The startup has filed to continue selling Oscar for Business in the state of New York, where it started to offer the service in January then rolling on to California a couple months back. Oscar tells TechCrunch it will also begin offering the service in New Jersey.

However, the majority of the expansion seems to rest on the individual exchanges,or the state-based marketplaces where individuals can buy health insurance policies. At first glance, Tennessee might seem a curious choice for expansion into these individual exchanges as one of the larger insurers Humana has pledged to pull out of parts of the state by 2018. Some of the more rural areas in the state and elsewhere have proved to be a tough go for health insurance companies on the exchange. But, Oscar is placing its bet on the metropolis of Nashville, which holds a population a little less than half the size of San Francisco.

In Ohio, Oscar has partnered with the Cleveland Clinic to sell individual health insurance next year. Other cities like Austin and San Antonio, Texas look like healthy options for the startup as well. San Antonio has already pulled in 40,000 new members this year, according to Oscar.

But any expansion seems hazardous for health insurers at this time. Obamacare has not worked out financially for many of the health insurance companies, which have discovered the original premises of population health were false, leading to a strain on the system and a failure on the government end to supplement in less lucrative areas. Oscar, which lost $102 million in just its New York and New Jersey markets in 2016, has backed up the claim of other insurers, saying the government still owes them $200 million.

A recent report by the Robert Wood Johnson Foundation said that of the 37 individual provider plans formed since 2015, only four have been profitable and another five have gone out of business. Now, many of the larger insurers are looking to get out.

Expansion seems double the risk when you add Trump’s healthcare bill. That bill, known as the American Health Care Act (AHCA) is currently up for debate in the Senate and threatens to derail the ACA altogether. Oscar hangs the majority of its success on those exchanges and it was the ACA that helped Oscar climb to its nearly three billion dollar valuation when it launched four years ago.

For now, the company seems unbothered, “We’re confident that when the dust settles, the market for health insurance will stabilize in time for 2018,” it told TechCrunch in a statement. “For all of the political noise, there are simply too many lives at stake for representatives in Washington, D.C. not to do what’s right for the people.”

And if Oscar continues to bet on the horse that got it here, that might prove lucrative in the end — at least if it works out the way most of those offering insurance on the individual exchanges hope it will. Meanwhile, the company has pulled out of less profitable areas, scaled back on costlier doctors and hospitals and raised its prices for customers in New York by as much as 30 percent to turn its losses around.

Of course, all new areas are subject to regulatory approval and Oscar has merely done the paper work for now so we’ll have to see how it shakes out for 2018.