Smaller publicly-traded insurers touted earnings accomplishments in second quarter results, after facing a number of headwinds in recent years, including pandemic-induced medical costs.
Executives for Clover Health, Oscar Health and Bright Health all pointed to metrics indicating progress toward profitability in results released Tuesday and Wednesday, after refocusing their businesses to chase earnings.
Clover notched its first quarterly adjusted earnings before interest, taxes, depreciation and amortization profit as a public company, while Oscar reached total company profitability for the second quarter in a row.
Meanwhile, Bright posted its first quarter ever with positive adjusted EBITDA in the second quarter.
Clover
Clover posted $10 million in EBITDA in the quarter — its first quarterly adjusted EBITDA profit as a public company, CEO Andrew Toy said on a Tuesday call with investors.
It’s also Clover’s second positive EBITDA quarter in the company’s history, according to TD Cowen analyst Gary Taylor. The last was in the second quarter of 2020, before Clover went public, Taylor said.
Clover provides Medicare Advantage insurance plans and direct contracts with primary care physicians, and has a software platform to aid clinical decision making in a bid to keep costs low.
The company has focused on deepening its presence in more successful MA markets following cost challenges, and has been scaling back its participation in direct contracting partly due to CMS changes to the model.
Following the quarter, Clover raised its adjusted EBITDA guidance for 2023.
Oscar
New York-based Oscar reached total company profitability for the second quarter in a row, with an adjusted EBITDA of $36 million, according to CEO Mark Bertolini.
Oscar, which offers individual market, commercial and MA plans, has exited several underperforming markets recently, including Affordable Care Act marketplaces in Arkansas, Colorado and California. The payer also cut MA plans in New York and Texas as it seeks profitability.
“We continue to view insurance company profitability this year and total company profitability next year as important milestones for us. And we are very encouraged by our results to date,” Bertolini said on the payer’s Tuesday call.
Management said Oscar’s year-to-date claims experience has been better than expected, helping its medical loss ratio dip to 79.9% compared to 82.2% during the same time last year.
Oscar is pricing for growth and margin expansion in 2024, and plans to increase its service area footprint in more than half of its current states, according to Bertolini.
“Our growth strategy for 2024 focuses on leveraging the breadth of our deep provider partnerships to expand into more rural areas,” Bertolini said.
The payer, which historically has had a younger and healthier population, has also been working on shifting its population mix closer to the market average, to lower risk-adjustment payments.
Oscar projects an EBITDA loss of between $175 million to $75 million this year, and said it expects to come in closer to the $75 million side of the loss forecasts.
Bright
Meanwhile, Bright posted its first quarter ever with positive adjusted EBITDA. The company posted adjusted EBITDA of $6.4 million, compared to an adjusted EBITDA loss of $23.3 million same time last year.
Bright has struggled after going public in 2021, and has since shed its insurance products and other assets to improve its operations. In its most recent deal, Bright sold its MA plans in California to Molina, marking Bright’s complete exit from the insurance business.
“We expect the sale of our California Medicare Advantage announced at the end of the second quarter will bolster our balance sheet to continue on our path to long-term profitable growth,” Bright CEO Mike Mikan said in a statement on the quarter.
Minneapolis-based Bright shrunk its net loss to $88.6 million in the quarter, compared to a net loss of $251.3 million same time last year
Bright expects to reach enterprise profitability in 2023.