Oscar Health (NYSE:OSCR) outlined a sharp pivot from a difficult 2025 to what management described as a return to profitability in 2026, driven by membership growth, rate actions, and continued administrative cost leverage supported by technology and AI.
2025 results: revenue growth offset by risk adjustment headwinds
For full-year 2025, Oscar reported total revenue of $11.7 billion, up 28% year over year. Management said the year was challenging across ACA carriers as industry-wide market morbidity increased, which pressured claims and risk adjustment results.
Oscar also reported a net loss of $443 million for 2025 and an adjusted EBITDA loss of approximately $280 million.
Fourth-quarter dynamics: risk adjustment true-up drove MLR spike
In the fourth quarter, Oscar ended 2025 with approximately 2 million members, an increase of 22% year over year. The fourth-quarter MLR was 95.4%, up 730 basis points year over year.
Blackley said the quarter’s MLR performance was “vastly driven” by a risk adjustment true-up. Oscar increased its risk adjustment accrual by $275 million in the quarter after receiving an updated risk adjustment report for claims through October, which indicated Oscar’s membership was healthier than the broader market relative to the company’s expectations. That increase was partially offset by $99 million of favorable in-year development and $36 million of favorable prior-period development, primarily tied to prior-year claims runout.
Utilization was “modestly above” expectations in the quarter. Management said inpatient utilization continued to moderate, while outpatient and professional utilization increased, which Oscar associated with members accelerating care as enhanced premium tax credits expired. Pharmacy utilization was described as largely in line with expectations. In response to a question about whether fourth-quarter utilization could carry into 2026, Blackley pointed to areas like substance use disorder, some mental health benefits, and labs as categories that ticked up, but said they did not suggest a concerning carry-forward impact.
Industry and enrollment backdrop: market contraction and subsidy changes
Bertolini characterized 2025 as a “reset year” for the industry, citing Medicaid lives entering the market and CMS program integrity initiatives as factors that shifted market dynamics and increased morbidity. He said Oscar’s pricing strategy had assumed the expiration of enhanced premium tax credits and that final 2026 rates reflected higher market morbidity, elevated trend, and program integrity effects.
Management cited CMS data indicating overall individual market membership of 23 million lives, described as a better-than-expected year-over-year decline of about 5%. Bertolini cautioned that passively enrolled members facing higher premiums may exit when grace periods expire, and said greater clarity on “final paid membership” should come when CMS releases final enrollment data mid-year. He added that current data suggests market contraction may track toward the lower end of Oscar’s previously discussed 20% to 30% range.
Membership growth and product changes: record open enrollment and metal mix shift
Oscar said the 2026 open enrollment period was a company record. Bertolini reported 3.4 million members as of February 1, 2026, and the company expects to start the second quarter with approximately 3 million paid members, which would represent a 58% increase year over year. Management also said Oscar’s market share across its footprint increased from 17% in 2025 to 30% in 2026.
The company emphasized plan design and distribution efforts ahead of the enhanced premium tax credit expiration, including the creation of new Bronze and Gold plans and a 60% expansion in broker partnerships. On the call, management said brokers are a key channel, with roughly 90% to 95% of members coming through brokers, though some custom plans (such as HelloMeno) saw significant direct enrollment.
Oscar also highlighted new “lifestyle offerings,” including:
- HelloMeno, which management described as the first menopause plan in the ACA
- Buena Salud, a “Spanish First” experience for members with diabetes
- Hy-Vee Health with Oscar, described as an ICHRA plan
In response to questions about changing metal mix, management provided specific shifts. Oscar’s 2026 mix moved meaningfully away from Silver and toward Bronze and Gold:
- Bronze: about 25% in the prior two years to 39% in 2026
- Silver: about 71% in the prior two years to 36% in 2026
- Gold: about 3% to 4% in the prior two years to 25% in 2026
Management noted that the company’s average member is 38 years old, about one year younger than the prior year, and said that migration from Silver to Bronze and Gold was expected given plan designs aimed at affordability after the subsidy changes.
2026 outlook: higher revenue, improved MLR and SG&A, return to operating profitability
For 2026, Oscar guided for total revenue of $18.7 billion to $19.0 billion, which would be an increase of 61% year over year at the midpoint. The company said the outlook reflects above-market open enrollment growth, solid retention, and rate increases. Management stated the weighted average rate increase for 2026 was approximately 28%, but added that the per-member-per-month increase is lower due to shifts in age and metal mix.
Oscar guided to an MLR of 82.4% to 83.4% in 2026, implying roughly 450 basis points of year-over-year improvement at the midpoint. Blackley said the guidance incorporates elevated morbidity observed in 2025, an incremental increase in morbidity in 2026, and trends and utilization patterns largely consistent with 2025. He also said third-party data assessing new members’ risk profiles is tracking modestly better than pricing expectations, while renewal risk scores are in line with expectations.
On risk adjustment, Oscar expects risk adjustment as a percentage of direct premiums to be approximately 20% in 2026, up from 2025. Blackley said Oscar is gaining share among younger, healthier members, contributing to higher risk adjustment. He also said forecasting is complicated by limited visibility into broader market movements, and noted engagement with Wakely regarding proposed reporting intended to provide more timely market information.
On expenses, Oscar guided to a 2026 SG&A expense ratio of 15.8% to 16.3%, representing about 140 basis points of improvement at the midpoint, as scale and technology-driven efficiencies continue. In 2025, Oscar’s SG&A expense ratio improved by 160 basis points to 17.5%, which management attributed to fixed cost leverage, lower exchange fees, disciplined cost management, and technology and AI initiatives.
For profitability, Oscar expects earnings from operations of $250 million to $450 million in 2026, which management said represents nearly $750 million of year-over-year improvement at the midpoint and implies an operating margin of about 1.9% at the midpoint. Blackley added that adjusted EBITDA is expected to be about $115 million higher than earnings from operations.
Oscar also reviewed capital actions and liquidity, noting a $410 million convertible notes offering due 2030 (with $360 million of net proceeds) and a new $475 million three-year revolving credit facility. The company ended 2025 with approximately $5.5 billion of cash and investments, including $414 million at the parent, and said its insurance subsidiaries had about $1 billion of capital in surplus, including $315 million of excess capital.
About Oscar Health (NYSE:OSCR)
Oscar Health, trading on the New York Stock Exchange under the ticker OSCR, is a technology-driven health insurance company headquartered in New York, New York. Founded in 2012 by Mario Schlosser, Joshua Kushner and Kevin Nazemi, the company was built with the goal of simplifying healthcare coverage and enhancing member experience. Oscar leverages a proprietary digital platform to streamline plan enrollment, claims administration and member support, distinguishing itself in the individual, family and small group insurance markets.
The company’s primary products include on-exchange individual and family medical plans under the Affordable Care Act, off-exchange plans, as well as Medicare Advantage offerings.
