Dive Brief:

• Oscar Insurance Corp. an emerging health coverage carrier, is re-thinking its strategy related to the Affordable Care Act, which has caused losses for the startup. More specifically, Oscar will withdraw from two unprofitable markets in 2017, according to Bloomberg News.
• The startup will stop selling Affordable Care Act plans to consumers in Dallas, Texas, and the state of New Jersey, Bloomberg reports, a move that is part of a more cautious strategy heading into the new year.
• Oscar originally was launched based on the expected growth of new markets and the millions of Americans without coverage who would now have that coverage under the ACA. But so far, it seems, Oscar's plans have not materialized, having collided head-on with the same issues, mainly a lack of profitability, that caused larger, more well-known carriers such as UnitedHealth Group, Aetna and others to withdraw from some of the nation's more unprofitable government exchange regions and states.

Dive Insight:

While departing Dallas and New Jersey, Oscar plans to stay in the Los Angeles and New York City areas, as well as in San Antonio, and it will grow ACA-based expansion plans into the San Francisco region during 2017.

While the impact on most employers of this move (and others related to pulling out of ACA markets) will be minimal, small employers who had looked to the ACA to help their employees get relatively inexpensive healthcare coverage may be affected. As for Oscar, Bloomberg reports that in 2017 the company will start selling small-group insurance plans and by year's end expects to be mixing it up with brand name carriers who primarily serve larger employers — at least hoping to be one of the coverage choices offered to workers during enrollment periods.