Oscar Health’s repricing and technology-driven efficiency are creating a major earnings inflection, but subsidy dependence and churn keep the risk/reward highly asymmetric.
Overview
Oscar Health is a technology-focused managed care company concentrated in the ACA individual market, with 2.04 million members at year-end 2025 across 18 states and more than 1.17 million members in Florida. It earns premium revenue primarily from subsidized coverage: 93% of 2025 premiums were funded through federal APTCs and 7% directly by members. **The central investment story is a sharp profitability inflection:** Q2 2026 revenue rose 70.4% year over year to $4.88 billion, GAAP EPS reached $1.10 versus $(0.89) a year earlier, and operating income reached $388.6 million at an 8.0% margin. The turnaround reflects approximately 28% weighted-average rate increases, a 79.2% MLR, and record-low 14.2% SG&A. Oscar’s unified technology architecture, high historical 40-to-50 NPS, Oswell care routing, and ICHRA expansion differentiate it from fragmented legacy peers. Management guides to 2026 revenue of $18.7 billion-$19.0 billion and operating income of $500 million-$700 million. However, elevated CMS-related churn, subsidy-driven adverse selection, and a $164 million favorable reserve development temper confidence. Wall Street remains Hold/Neutral with targets around $24.05-$25.20, below the $26.54 post-earnings close.