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GOP Healthcare Battle Putting Pressure on Health Startups

By NexChange
Capital Markets, FinTech

The Republicans’ healthcare plan to replace Obamacare was released last week, and it could have major consequences for many health startups that thrived under the Obama administration, reports Business Insider.

“Repeal and Replace” has acted practically as a slogan for Republicans, and the effects that the GOP’s healthcare plan will have on the population, as well as the newest health companies, are becoming clear. However, Senate Republicans remain embroiled in a stalemate over its proposal and a vote seems increasingly unlikely to happen until after the Fourth of July holiday

The Congressional Budget Office (CBO), a nonpartisan federal agency, estimated that the Better Care Reconciliation Act (BCRA) would reduce healthcare coverage by 22 million people by 2026, per Business Insider. For healthtech startups, this means that the Affordable Care Act framework under which they were established could be dismantled if either the Senate or House bills pass.

Business Inside spoke to several healthtech companies, including Healthify, a startup that  uses technology to identify socio-economic factors of poor health, and works alongside Accountable Care Organizations (ACOs) to establish connections between Medicaid and Medicare patients and all basic needs. This includes anything from food to day care to transportation.

However, Healthify is due to struggle if the bills pass, CEO Manik Bhat told Business Insider, adding that these bills will put unnecessary pressure on defenseless people and ACOs at the state level

Medicaid currently covers over 74 million citizens, including the poor, disabled, elderly, and pregnant. Business Insider reports that CBO’s estimates foresee cuts over the next decade of $772 billion for the Senate bill and an astounding $880 billion for the House bill.

These cuts would ravage every states’ Medicaid budget.

Interestingly enough, another potentially affected healthcare startup is Oscar Health, founded by Trump adviser and son-in-law Jared Kushner and his brother Joshua, which is valued at $2.7 billion. Extensively meshed with the ACA, Oscare was formed to sell individual market plans under Obamacare and either bill passing could completely topple its current exchange platform, where it serves most of its customers.

Oscar recently raised $65 million in Series C funding.

Quartet Health, which was founded in 2014, is a behavioral health startup that connects a patient’s GP with their mental health professionals, in order to eliminate redundant diagnoses and cooperate between experts. CEO Arun Gupta tells Business Insider that the ACA created a realistic healthcare environment that was based on previous patient outcomes, and this was integral to Quartet’s success.


These healthtech startups, Business Insider notes, started to blossom under the ACA. Now, they must combat a potentially destructive pair of bills to continue to innovate and serve the country.

Photo: Getty iStock

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