The tech giant has now announced that it has made a massive investment into a coverage startup.
Last week, Google announced that it had made an investment of $32.5 million into Oscar Health Insurance Corp, which is a startup that has been drawing considerable interest as its angle could disrupt the traditional form of coverage and could shake up the power of the market leaders in the U.S., such as Anthem and UnitedHealth Group.
The current valuation that the deal brings to Oscar has been calculated to be at $1.75 billion.
This deal through Google Capital, the growth-equity fund, has boosted the 2 year old health insurance company’s capital from where it had been at $350 million. What Oscar is hoping is that it will be able to reach both new and existing customers by offering its plans in a method that is more like an internet service. The company will be selling its plans by way of the insurance exchanges created for the Affordable Care Act and will offer prices that will be competitive with the offerings of established insurers.
This health insurance plan selling strategy has been working, so far, for this insurer.
So far, it has already enrolled more than 40,000 policyholders in New York and New Jersey, and its intentions are to start expanding beyond those two states in order to include Texas and California by the start of 2016.
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Until now, many professionals in the industry have been brushing off Oscar’s presence. They have said that it could currently be accepting a certain degree of loss in order to allow it to offer competitive rates by way of discounts from healthcare providers. That said, the additional funds from Google will certainly have covered the losses that have been experienced, which came to $27.5 million last year.
Though large insurance companies could now be facing some disruption as Oscar moves ahead, brokers will be relieved to know that Google isn’t actually planning on getting into the healthcare industry as much as it plans to work on the development of new healthcare tech and distribution systems. For example, Oscar currently offers discounts to customers who wear fitness tracking devices to show that they live a healthful lifestyle, and they will be progressing ahead with other forms of tech as it comes into the marketplace.