Oscar's ties to Trump put it in tricky position

Donald Trump
Donald Trump has said he plans to repeal the ACA, but that move could damage the health insurance startup in which two members of his inner circle have invested.

Oscar Insurance's connections to Donald Trump’s inner circle could put it in an awkward situation, as the president-elect’s policy prescriptions could damage the startup insurer’s business.

One of Oscar's top investors, Josh Kushner, is the brother of Ivanka Trump’s husband, Jared Kushner, who has been considered for a position in his father-in-law's administration, The Wall Street Journal reports. Prominent Trump supporter Peter Thiel is also one of Oscar’s main investors.

Oscar maintains that affordable and quality coverage is both ethically proper and economically prudent, according to a company blog post published in the wake of the election. The shift toward an individual health insurance market is the company’s first reason listed in a section of the post titled, “Why Oscar, why now.”

"Companies like Oscar will have a hard time surviving without a sustainable exchange marketplace," Deep Banerjee of Standard & Poor's global insurance ratings division told the WSJ.  

In his campaign, Trump continuously referred to the ACA as a “disaster," though he later noted that he would like to keep some parts of the healthcare reform law. But if he decides to abandon an appeal in the House v. Burwell case concerning the legality of ACA subsidies, the individual marketplaces could collapse not long after he takes office.

Oscar recently reported $45 million in losses in the third quarter of 2016—primarily due to costs associated with building out its business and technology capabilities, in addition to high medical costs among members. The company has been privately valued at approximately $2.7 billion.