Oscar Health, Inc 10-Q for FY2025 Q2
Oscar Health, Inc. (OSCR)
10-Q
2025-08-07
For: 2025-06-30
View Original
Added on
April 07, 2026
About this 10-Q
Oscar Health, Inc filed this 10-Q on August 7, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.86B
- up 29.0% from $2.22B a year earlier
- Net loss
- $228.36M
- compared with net income of $56.21M a year earlier
- Diluted EPS
- -$0.89
- compared with $0.20 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended June 30, 2025
or
For the transition period from __________to__________
Commission File Number: 001-40154
____________________________________________________________
(Exact name of registrant as specified in its charter)
____________________________________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code: (646) 403-3677
Former name, former address and former fiscal year, if changed since last report: N/A
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
| Class of Stock | Shares Outstanding as of July 31, 2025 (in thousands) | |||||||
| Class A Common Stock, par value $0.00001 per share | ||||||||
| Class B Common Stock, par value $0.00001 per share | ||||||||
Oscar Health, Inc.
TABLE OF CONTENTS
| Page | ||||||||
PART I - FINANCIAL INFORMATION | ||||||||
| Item 1. | Financial Statements (unaudited) | |||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
PART II - OTHER INFORMATION | ||||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
This Quarterly Report on Form 10-Q for the period ended June 30, 2025 (“Quarterly Report on Form 10-Q”) contains the following defined terms, unless context otherwise requires: (i) “Oscar,” “the Company,” “we,” “our,” “us” or like terms refer to Oscar Health, Inc. and its subsidiaries, (ii) “Thrive Capital” refers to Thrive Capital Management, LLC, a Delaware limited liability company, and the investment funds affiliated with or advised by Thrive Capital Management, LLC and (iii) “Thrive General Partners” refers to Thrive Partners II GP, LLC, Thrive Partners III GP, LLC, Thrive Partners V GP, LLC, Thrive Partners VI GP, LLC, Thrive Partners VII GP, LLC, and Thrive Partners VII Growth GP, LLC, each of which is a general partner of a Thrive Capital-affiliated fund.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continues” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding our future results of operations and financial position, risk adjustment transfer payments, industry, regulatory and business trends, our commercial arrangements, business strategy, plans and plan mix, membership and market growth, and our objectives for future operations.
The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following:
•Our ability to execute our strategy and manage our growth effectively (including our ability to successfully integrate strategic acquisitions);
•Our ability to retain and expand our member base;
•Our ability to accurately estimate our incurred medical expenses, or to effectively manage our medical costs or related administrative costs;
•Our ability to maintain profitability in the future;
•Unanticipated results of, or changes to, risk adjustment programs or our estimates thereof;
•Our ability to arrange for the delivery of quality care and maintain good relations with brokers and the physicians, hospitals, and other providers within and outside our provider networks;
•Evolving federal or state laws or regulations (including any changes in the interpretation or enforcement of existing laws and regulations), including changes with respect to the Patient Protection and Affordable Care Act (“ACA”) and any regulations enacted thereunder, non-renewal of the enhanced Advanced Premium Tax Credits (“APTCs”), the implementation of new program integrity rules or other government actions, such as the imposition of tariffs;
•Our ability to comply with ongoing regulatory requirements, including capital reserve and surplus requirements and applicable performance standards;
•Changes or developments in the health insurance markets in the United States;
•Our, or any of our vendors’, ability to comply with laws, regulations, and standards related to the handling of information about individuals or applicable consumer protection laws, including as a result of our participation in government-sponsored programs;
•Heightened competition in the markets in which we participate;
•Our ability to utilize quota share reinsurance to meet our capital and surplus requirements and protect against downside risk on medical claims;
•Unfavorable or otherwise costly outcomes of lawsuits, audits, investigations, and other third-party claims;
•Incurrence of data security breaches of our and our partners’ information and technology systems;
3
•Our ability to attract and retain qualified personnel;
•Our ability to detect and prevent material weaknesses or significant control deficiencies in our internal controls over financial reporting or other failure to maintain an effective system of internal controls;
•Adverse publicity or other adverse consequences related to our dual class structure or “controlled company” status; and
•The other risks and uncertainties described under the caption “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, and in Part I Item A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission on February 20, 2025.
The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
This Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q should be read with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.
4
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Oscar Health, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands, except per share amounts) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
Revenue | |||||||||||||||||||||||
| Premium | $ | $ | $ | $ | |||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Other revenues | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Medical | |||||||||||||||||||||||
| Selling, general, and administrative | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Earnings (loss) from operations | ( | ||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
| Other expenses (income) | ( | ||||||||||||||||||||||
Earnings (loss) before income taxes | ( | ||||||||||||||||||||||
Income tax expense (benefit) | ( | ||||||||||||||||||||||
Net income (loss) | ( | ||||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | ( | ||||||||||||||||||||||
| Net income (loss) attributable to Oscar Health, Inc. | $ | ( | $ | $ | $ | ||||||||||||||||||
| Earnings (loss) per Share | |||||||||||||||||||||||
Basic | $ | ( | $ | $ | $ | ||||||||||||||||||
Diluted | $ | ( | $ | $ | $ | ||||||||||||||||||
| Weighted Average Common Shares Outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
5
Oscar Health, Inc.
Condensed Consolidated Statements of Comprehensive Income
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | $ | ||||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Net unrealized gains (loss) on securities available for sale | ( | ( | |||||||||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||||||||
| Comprehensive income (loss) attributable to noncontrolling interests | ( | ||||||||||||||||||||||
| Comprehensive income (loss) attributable to Oscar Health, Inc. | $ | ( | $ | $ | $ | ||||||||||||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
6
Oscar Health, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
| (in thousands, except per share amounts) | June 30, 2025 | December 31, 2024 | |||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Premiums and accounts receivable (net of allowance for credit losses of $ | |||||||||||
Risk adjustment transfer receivable | |||||||||||
Reinsurance recoverable | |||||||||||
| Other current assets | |||||||||||
Total current assets | |||||||||||
Property, equipment, and capitalized software, net | |||||||||||
Long-term investments | |||||||||||
Restricted deposits | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders' Equity | |||||||||||
Current Liabilities: | |||||||||||
Benefits payable | $ | $ | |||||||||
Risk adjustment transfer payable | |||||||||||
Unearned premiums | |||||||||||
Accounts payable and other liabilities | |||||||||||
Reinsurance payable | |||||||||||
Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 12) | |||||||||||
Stockholders' Equity | |||||||||||
Class A common stock ($ | |||||||||||
Class B common stock ($ | |||||||||||
Treasury stock ( | ( | ( | |||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive income (loss) | ( | ||||||||||
| Total Oscar Health, Inc. stockholders' equity | |||||||||||
| Noncontrolling interests | |||||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ | |||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
7
Oscar Health, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Common stock, Class A shares | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Issuance of common stock from equity incentive plans | |||||||||||||||||||||||
| Shares withheld for net settlement of share-based awards | ( | ( | |||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Common stock, Class B shares | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Issuance of common stock from equity incentive plans | |||||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Common stock, Class A | |||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Common Stock, Class B | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Treasury stock | |||||||||||||||||||||||
| Balance, beginning of period | ( | ( | ( | ( | |||||||||||||||||||
| Balance, end of period | ( | ( | ( | ( | |||||||||||||||||||
| Additional paid-in capital | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Stock-based compensation expense | |||||||||||||||||||||||
| Issuance of common stock from equity incentive plans | |||||||||||||||||||||||
| Net settlement for taxes related to share-based awards | ( | — | ( | — | |||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Accumulated Deficit | |||||||||||||||||||||||
| Balance, beginning of period | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) | ( | ||||||||||||||||||||||
| Balance, end of period | ( | ( | ( | ( | |||||||||||||||||||
| Accumulated other comprehensive income (loss) | |||||||||||||||||||||||
| Balance, beginning of period | ( | ( | |||||||||||||||||||||
| Unrealized gains (loss) on investments, net | ( | ( | |||||||||||||||||||||
| Balance, end of period | ( | ( | |||||||||||||||||||||
| Noncontrolling interests | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | ( | ||||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Total stockholders' equity | $ | $ | $ | $ | |||||||||||||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
8
Oscar Health, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Six Months Ended June 30, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
Cash Flows from Operating Activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Deferred taxes | |||||||||||
Net realized gain on sale of financial instruments | ( | ||||||||||
Depreciation and amortization expense | |||||||||||
| Amortization of debt issuance costs | |||||||||||
Stock-based compensation expense | |||||||||||
| Net accretion of investments | ( | ( | |||||||||
| Change in provision for credit losses | ( | ( | |||||||||
Changes in assets and liabilities: | |||||||||||
(Increase) / decrease in: | |||||||||||
| Premium and other receivables | ( | ( | |||||||||
Risk adjustment transfer receivable | ( | ( | |||||||||
Reinsurance recoverable | ( | ||||||||||
Other assets | ( | ( | |||||||||
Increase / (decrease) in: | |||||||||||
Benefits payable | |||||||||||
Unearned premiums | ( | ( | |||||||||
Premium deficiency reserve | ( | ||||||||||
Accounts payable and other liabilities | |||||||||||
Reinsurance payable | ( | ( | |||||||||
Risk adjustment transfer payable | |||||||||||
| Net cash provided by operating activities | |||||||||||
Cash Flows from Investing Activities: | |||||||||||
Purchase of investments | ( | ( | |||||||||
Sale of investments | |||||||||||
Maturity and paydowns of investments | |||||||||||
Purchase of property, equipment and capitalized software | ( | ( | |||||||||
Change in restricted deposits | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash Flows from Financing Activities: | |||||||||||
| Tax payments related to net settlement of share-based awards | ( | ||||||||||
Proceeds from exercise of stock options | |||||||||||
Net cash provided by financing activities | |||||||||||
Increase in cash, cash equivalents and restricted cash equivalents | |||||||||||
Cash, cash equivalents, restricted cash and cash equivalents—beginning of period | |||||||||||
Cash, cash equivalents, restricted cash and cash equivalents—end of period | |||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash and cash equivalents included in restricted deposits | |||||||||||
Total cash, cash equivalents and restricted cash and cash equivalents | $ | $ | |||||||||
| Supplemental Disclosures: | |||||||||||
| Interest payments | $ | $ | |||||||||
| Income tax payments | $ | $ | |||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
9
Oscar Health, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)
(in thousands, except per share amounts, or as otherwise stated herein)
1. ORGANIZATION
Oscar Health, Inc., together with its subsidiaries (either individually or collectively referred to as “Oscar” or the “Company”), is a leading healthcare technology company, whose mission is to make a healthier life accessible and affordable for all. The Company’s Class A common stock is traded on the New York Stock Exchange under the symbol “OSCR”.
Oscar operates as one reportable segment to sell insurance to individuals, families, and employees through the federal and state-run healthcare exchanges formed in conjunction with the Patient Protection and Affordable Care Act (“ACA”) and leverages its technology platform to provide services via its +Oscar offering. In May 2025, the Company purchased 100 three businesses operating in the individual market: INSXCloud, Inc. (a certified enhanced direct enrollment platform), IHC Specialty Benefits, Inc. (an insurance agency that sells individual medical and supplemental health products), and Healthinsurance.org, LLC (an online resource providing educational content for consumers navigating health insurance and the ACA marketplace). The Company determined that the Chief Executive Officer is the chief operating decision maker (“CODM”) who regularly reviews financial information and other key performance indicators on a consolidated basis, for the purposes of allocating resources and evaluating financial performance. Factors used in determining the reportable segment include the nature of operating activities, the Company’s organizational and reporting structure, and the type of information presented to the Company’s CODM to allocate resources and evaluate financial performance.
The Company’s member-first philosophy and innovative approach to care has earned the trust of approximately 2.0 million effectuated members (“members”), as of June 30, 2025. Effectuated members are those who are actively enrolled in one of the Company’s plans and whose required premium payments have either been made or are within the payment grace period.
Basis of Presentation
The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and the applicable rules and regulations of the Securities and Exchange Commission for interim financial information. As such, these financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statements.
These Condensed Consolidated Financial Statements are unaudited; however, in the opinion of management, they reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the information presented in conformity with U.S. GAAP applicable for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of results for the full year or future periods. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2024.
During the second quarter of 2025, management identified an understatement of Selling, general, and administrative (“SG&A”) expenses related to the 2023-2024 periods. In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No, 108, Considering the Effects of Prior Year Misstatements with Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the error and determined that the out of period adjustment was not material to the consolidated financial statements for the current interim periods or to any previously reported annual or interim periods. Accordingly, the Company recorded a $14.9 million adjustment in the current period within SG&A expenses related to prior periods.
10
Certain monetary amounts, percentages, and other figures included in this Quarterly Report on Form 10-Q have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report on Form 10-Q have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report on Form 10-Q may vary from those obtained by performing the same calculations using the figures in the Company's Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. Certain other amounts that appear in this Quarterly Report on Form 10-Q may not sum due to rounding.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates inherent in the preparation of the accompanying interim Condensed Consolidated Financial Statements include healthcare costs incurred but not yet reported (“IBNR”) and risk adjustment transfers. Estimates are based on past experience, evaluation of current trends, information from third-party professionals, and other considerations that are reasonable under the circumstances. Actual results may differ materially from these estimates.
Accounting Pronouncements - Not Yet Adopted
In December 2023, the FASB issued Accounting Standards Update No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and other amendments to improve the effectiveness of income tax disclosures. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. ASU 2023-09 applies on a prospective basis; however, retrospective application in all prior periods presented is permitted. While the standard will require additional disclosures related to the Company’s income taxes, the standard is not expected to have any material impact on the Company’s consolidated operating results, financial condition, or cash flows. The Company is currently evaluating the impact of the adoption of this guidance on the related disclosures before it becomes effective for the Company’s 2025 annual financial statements.
11
2. EARNINGS PER SHARE
Basic earnings per share (“EPS”) is computed by dividing Net income (loss) attributable to Oscar Health, Inc. for the period by the weighted-average shares of common stock outstanding during the period.
In periods when the Company is in a net loss position, potentially dilutive securities are excluded from the computation of diluted EPS because their inclusion would have an anti-dilutive effect; thus, basic EPS is the same as diluted EPS.
During periods of net income, diluted EPS is computed by adjusting Net income attributable to Oscar Health, Inc. for any interest charges and changes in the fair value of the bifurcated conversion option applicable to the convertible senior notes. This adjusted net income is then divided by the sum of the basic weighted-average shares of common stock outstanding and any dilutive potential common stock outstanding during the period, using the treasury stock method and the if-converted method for convertible senior notes, as described in “Note 8 - Debt.” Potential common stock includes the effect of outstanding dilutive stock options, restricted stock units, and performance-based restricted stock units. The computation for basic and diluted EPS is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
Numerator: | |||||||||||||||||||||||
| Net income (loss) attributable to Oscar Health, Inc. - basic | $ | ( | $ | $ | $ | ||||||||||||||||||
| Effect of convertible senior notes | |||||||||||||||||||||||
| Net income (loss) available to Oscar Health, Inc. common shareholders - diluted | $ | ( | $ | $ | $ | ||||||||||||||||||
Denominator: | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding - basic | |||||||||||||||||||||||
| Common stock equivalents | |||||||||||||||||||||||
| Effect of convertible senior notes | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding - diluted | |||||||||||||||||||||||
| Earnings (loss) per Share | |||||||||||||||||||||||
Basic | $ | ( | $ | $ | $ | ||||||||||||||||||
Diluted | $ | ( | $ | $ | $ | ||||||||||||||||||
The following potential common shares were excluded from the computation of diluted EPS because including them would have had an anti-dilutive effect:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
Stock options to purchase common stock | |||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||
| Performance-based restricted stock units | |||||||||||||||||||||||
| Shares underlying convertible notes (Note 8) | |||||||||||||||||||||||
Total | |||||||||||||||||||||||
12
3. REVENUE RECOGNITION
Premium
Premium revenue includes direct policy premiums collected from members and the federal government, assumed policy premiums received as part of the reinsurance arrangement under the Cigna+Oscar Small Group plan previously offered, and risk adjustment transfers. Premium revenue is net of ceded premium from excess of loss (“XOL”) and run-off quota share reinsurance contracts accounted for under reinsurance accounting (See “Note 9 - Reinsurance” for additional information on the Company’s reinsurance contracts).
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Direct policy premiums | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Assumed premiums | |||||||||||||||||||||||||||||||||||
| Risk adjustment transfers | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Reinsurance premiums ceded | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Premium | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
The direct policy premiums received from Centers for Medicare & Medicaid Services (“CMS”) for the three and six months ended June 30, 2025 were $3,244.7 million and $6,387.1 million, respectively. For the three and six months ended June 30, 2024, direct policy premiums received from CMS were $2,350.0 million and $4,463.8 million, respectively.
Other Revenues
Other revenues include revenue earned as part of services performed via the +Oscar platform, revenue share from virtual credit card rebates, revenue earned through the three companies acquired in May 2025, and sublease revenue. Other revenue is recognized in the period the contractual performance obligations are satisfied and measured in an amount that reflects the consideration the Company expects to be entitled to in exchange for performing the services. The timing of the Company's revenue recognition may differ from the timing of payment by customers. A receivable is recorded to Premiums and accounts receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, deferred revenue is recorded to Accounts payable and other liabilities when payment is received before the performance obligations are satisfied.
4. INVESTMENTS
Net investment income was attributable to the following:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Fixed maturity securities | $ | $ | $ | $ | |||||||||||||||||||
| Cash equivalents | |||||||||||||||||||||||
Other (1) | |||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
Investment expense | ( | ( | ( | ( | |||||||||||||||||||
Net investment income | $ | $ | $ | $ | |||||||||||||||||||
As of June 30, 2025 and December 31, 2024, the Company recorded accrued investment income of $21.8 million and $19.8 million, respectively.
13
The following tables provide summaries of the Company's carrying amounts and fair values of available-for-sale securities by major security type as of June 30, 2025 and December 31, 2024:
| June 30, 2025 | |||||||||||||||||||||||
| (in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||
U.S. treasury and agency securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Corporate notes | ( | ||||||||||||||||||||||
| Asset-backed securities | ( | ||||||||||||||||||||||
Other (1) | — | — | |||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ||||||||||||||||||
(1) Includes equity securities without a readily determinable market value.
| December 31, 2024 | |||||||||||||||||||||||||||||
| (in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||||||||
U.S. treasury and agency securities | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Corporate notes | ( | ||||||||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||||||||
Other (1) | — | — | |||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
(1) Includes equity securities without a readily determinable market value.
The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position, by the length of time in which the securities have continuously been in that position, as of June 30, 2025 and December 31, 2024:
| June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or Longer | ||||||||||||||||||||||||||||||||||
| (in thousands, except no. of securities) | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| U.S. treasury and agency securities | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
| Corporate notes | ( | ||||||||||||||||||||||||||||||||||
| Asset-backed securities | ( | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or Longer | ||||||||||||||||||||||||||||||||||
| (in thousands, except no. of securities) | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| U.S. treasury and agency securities | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
| Corporate notes | ( | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
The Company monitors available-for-sale debt securities for credit losses and recognizes an allowance for credit losses when factors indicate a decline in the fair value of a security is credit-related. Certain investments may experience a decline in fair value due to changes in market interest rates, changes in general economic conditions, or a deterioration in the credit worthiness of a security's issuer. For securities in an unrealized loss position that the Company does not intend to sell, the Company has assessed the gross unrealized losses during the period and determined an allowance for credit losses is not necessary because the declines in fair value are believed to be due to market fluctuations and not due to credit-related events.
14
The amortized cost and fair value of the Company's fixed maturity securities as of June 30, 2025 and December 31, 2024 by contractual maturity are shown below. Actual maturities of these securities could differ from their contractual maturities because issuers may have the right to call or prepay obligations, with or without penalties.
| June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
| Due in one year or less | $ | $ | $ | $ | |||||||||||||||||||
| Due after one year through five years | |||||||||||||||||||||||
| Due after five years through ten years | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
5. FAIR VALUE MEASUREMENTS
Fair value represents the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The Company's financial assets and liabilities measured at fair value on a recurring basis are categorized into a three-level fair value hierarchy based on the priority of the inputs used in the fair value valuation technique.
The levels of the fair value hierarchy are as follows:
•Level 1: Inputs utilize quoted (unadjusted) prices in active markets for identical assets or liabilities.
•Level 2: Inputs utilize quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations in which all significant inputs are observable in active markets.
•Level 3: Inputs utilized are unobservable but significant to the fair value measurement for the asset or liability. The unobservable inputs are used to measure fair value to the extent relevant observable inputs are not available. The unobservable inputs typically reflect management’s own estimates about the assumptions a market participant would use in pricing the asset or liability.
The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis:
| June 30, 2025 | |||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Investments | |||||||||||||||||||||||
U.S. treasury and agency securities | $ | $ | $ | $ | |||||||||||||||||||
Corporate notes | |||||||||||||||||||||||
| Asset-backed securities | |||||||||||||||||||||||
| Restricted investments | |||||||||||||||||||||||
U.S. treasury securities | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
15
| December 31, 2024 | |||||||||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||||
U.S. treasury and agency securities | $ | $ | $ | $ | |||||||||||||||||||||||||
Corporate notes | |||||||||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||||||||
| Restricted investments | |||||||||||||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||||||||
6. RESTRICTED CASH AND RESTRICTED DEPOSITS
The Company maintains cash, cash equivalents, and investments on deposit that are pledged to various state agencies in connection with its insurance licensure or property leases. The restricted cash and cash equivalents and restricted investments presented below are included in Restricted deposits in the accompanying Condensed Consolidated Balance Sheets.
| (in thousands) | June 30, 2025 | December 31, 2024 | |||||||||
| Restricted cash and cash equivalents | $ | $ | |||||||||
| Restricted investments | |||||||||||
| Restricted deposits | $ | $ | |||||||||
16
7. BENEFITS PAYABLE
Reserves for medical claims expenses are estimated using actuarial assumptions and recorded as Benefits payable liabilities on the Condensed Consolidated Balance Sheets. The assumptions for the estimates and for establishing the resulting liability are reviewed and any adjustments to reserves are reflected in the Condensed Consolidated Statements of Operations in the period in which the estimates are updated.
The following table provides a rollforward of the Company’s beginning and ending benefits payable and claims adjustment expenses (“CAE”) payable balances for the six months ended June 30, 2025 and 2024:
Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||||
| (in thousands) | Benefits Payable | Unallocated Claims Adjustment Expense | Total | Benefits Payable | Unallocated Claims Adjustment Expense | Total | |||||||||||||||||||||||||||||
| Benefits payable, beginning of the period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Less: Reinsurance recoverable | — | — | |||||||||||||||||||||||||||||||||
| Benefits payable, beginning of the period, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Claims incurred and CAE | |||||||||||||||||||||||||||||||||||
| Current year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Prior years | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Total claims incurred and CAE, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Claims paid and CAE | |||||||||||||||||||||||||||||||||||
| Current year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Prior years | |||||||||||||||||||||||||||||||||||
| Total claims and CAE paid, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Benefits and CAE payable, end of period, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Add: Reinsurance recoverable | — | — | |||||||||||||||||||||||||||||||||
| Benefits and CAE payable, end of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Amounts incurred related to prior periods vary from previously estimated liabilities as more claim information becomes available and claims are ultimately settled. The favorable prior period development recognized in the six months ended June 30, 2025 resulted primarily from lower than expected paid claims for 2024.
17
8. DEBT
Convertible Senior Notes
As previously disclosed in “Note 9 - Debt,” in our Annual Report on Form 10-K for the year ended December 31, 2024, in February 2022, the Company issued $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC, and Tenere Capital LLC (the “Initial Purchasers”). In connection with the issuance of the 2031 Notes, on January 27, 2022, the Company entered into an investment agreement with the Initial Purchasers (the “Investment Agreement”) and on February 3, 2022, the Company entered into an indenture with U.S. Bank, as Trustee (the “Indenture”). The 2031 Notes are the Company's senior, unsecured obligations which bear interest at a rate of 7.25 % per annum, payable in cash, semi-annually in arrears on June 30 and December 31 of each year, commencing on June 30, 2022. The 2031 Notes will mature on December 31, 2031, subject to earlier repurchase, redemption, or conversion.
Upon the occurrence of a fundamental change (as defined in the Indenture), holders of the 2031 Notes have the right to require the Company to repurchase all or some of their 2031 Notes for cash, subject to certain conditions. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date. Additionally, the initial purchasers of the 2031 Notes have the right to require the Company to repurchase all of their Notes for cash, on each of June 30, 2027, June 30, 2028, June 30, 2029 and June 30, 2030, subject to certain notice requirements.
The Company may not redeem the 2031 Notes prior to December 31, 2026. The Company may redeem all, but not less than all, of the 2031 Notes, at the Company's option, on or after December 31, 2026 and on or before the 35th scheduled trading day immediately preceding the maturity date, for a cash purchase price equal to the redemption price, but only if the last reported sale price per share of Class A common stock exceeds 200 % of the conversion price on each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the trading day immediately before the date on which the Company sends the redemption notice for such redemption. The redemption price will be a cash amount equal to the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Notwithstanding the foregoing, if the Company calls any of the 2031 Notes for redemption the Initial Purchasers have the right to convert the 2031 Notes and to elect to receive the consideration due upon conversion solely in shares of Class A common stock pursuant to the terms of the Investment Agreement.
The 2031 Notes are convertible into the Company's Class A common stock at an initial conversion rate of 120.1721 per $1,000 principal amount (equivalent to an initial conversion price of approximately $8.32 per share of Class A common stock), subject to customary adjustments upon the occurrence of certain events. The 2031 Notes may be converted at the option of the holders: (i) on or after August 31, 2031, (ii) if the Company calls the 2031 Notes for redemption, (iii) upon satisfaction of a Class A common stock sale price condition, (iv) upon satisfaction of a 2031 Note trading price condition, or (v) upon certain corporate events. Upon conversion, the 2031 Notes will be settled, at the Company's election, in shares of Class A common stock, cash, or a combination of cash and shares of Class A common stock, unless an Initial Purchaser of the 2031 Notes elects to receive the consideration due upon conversion solely in shares of Class A common stock pursuant to the terms of the Investment Agreement. During the quarterly period ended June 30, 2025, the Class A common stock sales price condition was satisfied when the last reported sales price per share of the Company’s common stock was greater than 130 % of the conversion price of $8.32 per share for each of at least twenty (20 ) trading days during the period of thirty (30 ) consecutive trading days ending on, and including, the last trading day of the quarter. As a result, the 2031 Notes are convertible during the third quarter of 2025 at the option of the holder. As of the date of this Quarterly Report on Form 10-Q, the 2031 Notes have not been converted.
18
As of June 30, 2025, the net carrying amount of the 2031 Notes was $299.9 million, with unamortized debt discount and issuance costs of $5.1 million. The estimated fair value of the 2031 Notes as of June 30, 2025 was $807.5 million. The Company classified the fair value of the 2031 Notes as a level 3 measurement due to the lack of observable market data over fair value inputs such as stock price volatility over the term of the 2031 Notes and the Company's cost of debt.
The following table presents the interest expense indicating an effective interest rate of 7.61 % over the term of the 2031 Notes:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Coupon interest expense | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Amortization of debt discount and issuance costs | |||||||||||||||||||||||||||||||||||
| Total interest expense | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Revolving Credit Facility
As previously disclosed in “Note 9 - Debt,” in our Annual Report on Form 10-K for the year ended December 31, 2024, on December 28, 2023, the Company entered into a third amendment to its senior secured credit agreement with Wells Fargo Bank, National Association, as lender and administrative agent, and certain other lenders party thereto from time to time (collectively, the “Lenders”), and Oscar Management Corporation, as a subsidiary guarantor, which amended the senior secured credit agreement, dated as of February 21, 2021 (as previously amended by the First Amendment to Credit Agreement, dated as of January 27, 2022 and the Second Amendment to Credit Agreement, dated as of July 21, 2023, the “Amended Credit Agreement”). The Amended Credit Agreement provides for a revolving loan credit facility (the “Revolving Credit Facility”) in the aggregate principal amount of $115.0 million, with proceeds to be used for general corporate purposes of the Company.
The Revolving Credit Facility contemplates guarantees by Oscar Management Corporation, each wholly owned subsidiary of the Company, and all of the Company's future direct and indirect subsidiaries (subject to certain permitted exceptions, including exceptions for certain guarantees (i) that would require material governmental consents or (ii) in respect of joint ventures). Oscar Management Corporation, IHC Specialty Benefits, Inc., INSXCloud, Inc., and HealthInsurance.org, LLC are currently the only guarantors. The Revolving Credit Facility is secured by substantially all of the Company’s and the guarantors’ assets (subject to certain exceptions). The Revolving Credit Facility is available for the Company to borrow under until December 28, 2025, provided the Company is in compliance with the restrictive and financial covenants contained therein, including financial covenants to maintain minimum thresholds related to direct policy premiums, Consolidated Adjusted EBITDA (as defined in the Revolving Credit Facility), and liquidity, as well as a maximum medical loss ratio. The Company is permitted to increase commitments under the Revolving Credit Facility by an aggregate amount not to exceed $50.0 million, subject to certain conditions.
As of June 30, 2025, there were no outstanding borrowings under the Revolving Credit Facility.
9. REINSURANCE
The Company participates in quota share reinsurance to limit risk and capital requirements and XOL reinsurance to mitigate the exposure of high cost or catastrophic member risk. The quota share reinsurance arrangements are with more than one counterparty with multiple state-level treaties. The XOL reinsurance arrangements are with a private counterparty and federal and state-run programs. A summary of the Company's reinsurance agreements and related accounting treatment is included in “Note 11 - Reinsurance,” in our Annual Report on Form 10-K for the year ended December 31, 2024.
As previously disclosed in “Note 1 - Organization,” in our Annual Report on Form 10-K for the year ended December 31, 2024, the Company did not renew the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024, and will continue to provide transition and run-off services through December 31, 2026, and share proportionally in all premiums and claims for any Cigna+Oscar Small Group plan sold or issued on or before December 15, 2024, in accordance with the terms of the arrangement.
19
Reinsurance Contracts Accounted for under Deposit Accounting
As of June 30, 2025 and December 31, 2024, a deposit liability balance of $45.7 million and $13.6 million, respectively, was recorded for the Company's quota share arrangements accounted for under deposit accounting and represented fees due to the reinsurer, which are recognized within Selling, general, and administrative expenses on the Consolidated Statements of Operations.
For the three and six months ended June 30, 2025, the Company ceded 49 55
Reinsurance Contracts Accounted for under Reinsurance Accounting
In the current year, reinsurance accounting applies to XOL treaties. In 2024, reinsurance accounting also applied to quota share reinsurance contracts that were in runoff. The tables below present information for the Company's reinsurance arrangements accounted for under reinsurance accounting. Please see “Note 3 - Revenue Recognition” for total reinsurance premiums ceded and reinsurance premiums assumed, which are included as components of total Premium revenue in the Condensed Consolidated Statements of Operations.
The following table reconciles total Medical expenses to the amount presented in the Condensed Consolidated Statements of Operations:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
Direct claims incurred | $ | $ | $ | $ | |||||||||||||||||||
Ceded reinsurance claims | ( | ( | ( | ( | |||||||||||||||||||
Assumed reinsurance claims | |||||||||||||||||||||||
Medical expenses | $ | $ | $ | $ | |||||||||||||||||||
The Company records SG&A expenses net of reinsurance ceding commissions and assumed SG&A expenses. The following table reconciles total Selling, general, and administrative expenses to the amount presented in the Condensed Consolidated Statements of Operations:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
Selling, general, and administrative expenses, gross | $ | $ | $ | $ | |||||||||||||||||||
Reinsurance ceding commissions | ( | ||||||||||||||||||||||
Selling, general, and administrative expenses | $ | $ | $ | $ | |||||||||||||||||||
The composition of the Reinsurance recoverable balance on the Condensed Consolidated Balance Sheets is as follows:
| (in thousands) | June 30, 2025 | December 31, 2024 | |||||||||
| Reinsurance premium and claim recoverables | $ | $ | |||||||||
| Reinsurance ceding commissions | |||||||||||
| Experience refunds on reinsurance agreements | ( | ( | |||||||||
| Reinsurance recoverable | $ | $ | |||||||||
Credit Ratings
The financial condition of the Company's reinsurers is regularly evaluated to minimize exposure to significant losses. A key credit quality indicator for reinsurance is the financial strength ratings issued by the credit rating agencies, which provide an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. The Company’s reinsurers have most recently been issued financial strength ratings of A+ or higher.
The creditworthiness of each reinsurer is evaluated in order to assess counterparty credit risk and estimate an allowance for expected credit losses on the Company's reinsurance recoverable balances.
20
10. BUSINESS ARRANGEMENTS
Variable Interest Entities
In the normal course of business, the Company entered into business arrangements with integrated health systems, as well as medical professional corporations that employ health care providers to deliver telemedical healthcare services to its covered member population in various states. The financial results of these entities are consolidated into the Company's financial statements.
The following table presents the collective assets and liabilities of the Company's variable interest entities:
| (in thousands) | June 30, 2025 | December 31, 2024 | |||||||||
| Assets | $ | $ | |||||||||
| Liabilities | $ | $ | |||||||||
11. RELATED PARTY TRANSACTIONS
In February 2022, the Company issued the 2031 Notes to funds affiliated with, among others, Thrive Capital (collectively, the “Initial Purchasers”). See “Note 8 - Debt” for additional information. In addition, pursuant to the Investment Agreement entered into with the Initial Purchasers, the Company agreed to amend the Twelfth Amended and Restated Investors' Rights Agreement dated as of March 5, 2021 (the “Investors’ Rights Agreement”), by and among the Company and the investors party thereto, to provide that the Notes and shares of Class A common stock issued or issuable upon conversion of any 2031 Notes held by entities affiliated with Thrive Capital will be subject to the registration rights contained in the Investors' Rights Agreement.
12. COMMITMENTS AND CONTINGENCIES
The Company’s current and past business practices are subject to review or other investigations by various state insurance and healthcare regulatory authorities and other state and federal regulatory authorities. These reviews focus on numerous facets of the Company’s business, including claims payment practices, statutory capital requirements, provider contracting, risk adjustment, competitive practices, commission payments, privacy issues, network adequacy, utilization management practices, pharmacy benefits, access to care, and sales practices, among others. Some of these reviews have historically resulted in fines imposed on the Company and some have required changes to certain of the Company’s practices. The Company continues to be subject to these reviews, which could result in additional fines or other sanctions being imposed on the Company or additional changes to certain of its practices.
The Company is also currently involved in, and may in the future from time to time become involved in, legal proceedings and other claims in the ordinary course of its business, including class actions and suits brought by the Company’s members, providers, commercial counterparties, employees, and other parties relating to the Company’s business, including management and administration of health benefit plans and other services. Such matters can include claims relating to the performance of contractual and non-contractual obligations to providers, vendors, members, employer groups, and others, including, but not limited to, the alleged failure to properly pay in-network and out-of-network claims and challenges to the manner in which the Company processes claims, disputes regarding the amounts owed under vendor contracts, various employment claims, disputes regarding reinsurance arrangements, disputes relating to intellectual property privacy, the Telephone Consumer Protection Act and class action lawsuits, or other and claims alleging that the Company has engaged in unfair business practices.
21
In addition, on May 12, 2022, a securities class action lawsuit against the Company, certain of its directors and officers, and the underwriters that participated in the Company’s initial public offering (“IPO”) was commenced in the United States District Court for the Southern District of New York (the “Court”), captioned Carpenter v. Oscar Health, Inc., et al., Case No. 1:22-CV-03885 (S.D.N.Y.) (the “Securities Action”). The initial complaint in the Securities Action asserted violations of Sections 11 and 15 of the Securities Act based on the Company’s purported failure to disclose in its IPO registration statement growing COVID-19 testing and treatment costs, the impact of significant Special Enrollment Period membership, and risk adjustment data validation results for 2019 and 2020. By Court orders dated September 27, 2022 and December 13, 2022, the Court appointed a lead plaintiff and lead counsel on behalf of the putative class. An amended complaint filed on December 6, 2022 asserted the same violations of Sections 11 and 15 of the Securities Act, but this time based on the Company’s alleged failure to disclose in its IPO registration statement purportedly inadequate controls and systems in connection with the risk adjustment data validation audit for 2019, alleging that this purported omission caused losses and damages for members of the putative class. The amended complaint sought unspecified compensatory damages as well as interest, fees, and costs. On April 4, 2023, the Company moved to dismiss the amended complaint. On March 6, 2025, the Court granted the motion to dismiss without prejudice and granted leave to file a second amended complaint. A second amended complaint was not timely filed and on April 22, 2025 the Court dismissed the case with prejudice.
The Company records liabilities for its reasonable estimates of probable losses resulting from these matters where appropriate. Estimates of losses resulting from legal and regulatory matters involving the Company are inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; or could result in a change in business practices. Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable that a loss may be incurred, the ultimate settlement of which could be material.
Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on Oscar's business, results of operations, financial condition or cash flows.
22
13. SEGMENT INFORMATION
The Company operates in and reports as a single reportable segment, as the CODM does not evaluate profitability nor evaluate performance or allocate resources below the level of the consolidated Company. The accounting policies of the segment are the same as those described in “Note 2 - Summary of Significant Accounting Policies,” in our Annual Report on Form 10-K for the year ended December 31, 2024. The CODM reviews Net income (loss) attributable to Oscar Health, Inc. and Earnings from operations presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. These metrics serve as benchmarks to evaluate the business, measure performance, identify trends, prepare financial projections, and make strategic decisions. The CODM does not evaluate performance or allocate resources based on segment assets data; therefore, total segment assets are not presented.
The following table presents the revenue, significant expenses, and net income (loss) for the Company’s segment. As the Company operates and reports as a single segment, its measure of segment net income (loss) is the same as Net income (loss) attributable to Oscar Health, Inc. on the Condensed Consolidated Statements of Operations.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
Medical expenses | |||||||||||||||||||||||
Selling, general, and administrative expenses: | |||||||||||||||||||||||
Member acquisition and servicing costs (1) | |||||||||||||||||||||||
Premium taxes, exchange fees, and other taxes and fees (2) | |||||||||||||||||||||||
All other SG&A (3) | |||||||||||||||||||||||
| Total Selling, general, and administrative expenses | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Earnings (loss) from operations | ( | ||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Other expenses (income) | ( | ||||||||||||||||||||||
| Earnings (loss) before income taxes | ( | ||||||||||||||||||||||
| Income tax expense (benefit) | ( | ||||||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | ( | ||||||||||||||||||||||
| Net income (loss) attributable to Oscar Health, Inc. | $ | ( | $ | $ | $ | ||||||||||||||||||
(1)Member acquisition and servicing costs include the Company’s expenses incurred to acquire, service, and fulfill obligations to members.
(2)Premium taxes, exchange fees, and other taxes and fees represent non-income tax charges from federal and state governments, including but not limited to healthcare exchange user fees and premium taxes.
(3)All other SG&A includes employee-related and administrative costs that are not member-based. Additionally, all other SG&A includes the net impact of quota share reinsurance accounted for under deposit accounting.
Significant Customers
The Company generates the majority of its total revenue from health insurance policy premiums, which primarily comes from subsidies received from CMS as part of the Advanced Premium Tax Credit program.
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14. RISK ADJUSTMENT
The risk adjustment programs in the markets we serve are administered federally by CMS and are designed to mitigate the potential impact of adverse selection and provide stability for health insurers. Under this program, each plan is assigned a risk score based upon demographic information and current year claims information related to its members. Plans with lower than average risk scores generally pay into the pool (a payable to CMS), while plans with higher than average risk scores generally receive distributions (a receivable from CMS). The Company estimates its risk adjustment transfer receivable or payable for each state by comparing its estimated risk score to the state average risk score. The Company records a receivable or payable as an adjustment to its premium revenues to reflect the year-to-date impact of the risk adjustment based on its best estimate. The Company reevaluates its risk adjustment transfer estimates as new information and market data becomes available until final reporting is received from CMS in later periods, which may be up to twelve months in arrears.
The following table provides a rollforward of the Company’s beginning and ending risk adjustment receivable and payable balances for the six months ended June 30, 2025 and 2024:
Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||||
| (in thousands) | Risk Adjustment Receivable | Risk Adjustment Payable | Net Risk Adjustment | Risk Adjustment Receivable | Risk Adjustment Payable | Net Risk Adjustment | |||||||||||||||||||||||||||||
Beginning balance (1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Change in accrual: | |||||||||||||||||||||||||||||||||||
| Current year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Prior years (2) | ( | ( | |||||||||||||||||||||||||||||||||
| Change in accrual, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Ending balance: | |||||||||||||||||||||||||||||||||||
| Current year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Prior years (3) | |||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(1)The table includes risk adjustment data validation (“RADV”) receivables and payables. The balance at the beginning of each year presented pertains to prior policy years.
(2)The change in the Change in accrual, net for Prior year includes immaterial payments for policy years prior to 2024.
(3)$1,564 million of the prior year net risk adjustment balance as June 30, 2025 relates to policy year 2024. $1,059 million of the prior year net risk adjustment balance as June 30, 2024 relates to policy year 2023.
During the six months ended June 30, 2025, the Company significantly increased their estimate of the net risk adjustment payable for the 2025 policy year as a result of new data received from third-party reports, using claims data through April 2025. The third-party reports provided estimates of the market risk score (a measure of morbidity) for the states where the Company participates in the ACA, indicating a meaningful market-wide increase in morbidity in 2025.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, 2024 that was filed with the SEC on February 20, 2025. Unless the context otherwise requires, references in this MD&A to “we,” “us,” “our,” “Oscar,” “Oscar Health, Inc,” and the “Company” mean the business and operations of Oscar Health, Inc. and its consolidated subsidiaries.
Index to this MD&A
Management's discussion and analysis of financial condition and results of operations is comprised of the following sections:
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Overview
Oscar is a leading healthcare technology company built around a full stack technology platform and a relentless focus on member experience. We have been challenging the status quo in the healthcare system since our founding in 2012, and are dedicated to making a healthier life accessible and affordable for all. Oscar serves individuals, families, and employees through the Patient Protection and Affordable Care Act (“ACA”). We also offer health technology solutions that power the healthcare industry through +Oscar. In May 2025, the Company purchased 100% of the equity interests in three businesses operating in the individual market: INSXCloud, Inc. (a certified enhanced direct enrollment platform), IHC Specialty Benefits, Inc. (an insurance agency that sells individual medical and supplemental health products), and Healthinsurance.org, LLC (an online resource providing educational content for consumers navigating health insurance and the ACA marketplace). Our technology drives superior experiences, deep engagement, and high-value clinical care, earning us the trust of approximately 2.0 million effectuated members (“members”) as of June 30, 2025. Effectuated members are those who are actively enrolled in one of the Company’s plans and whose required premium payments have either been made or are within the payment grace period.
We regularly review our Total Revenue, Medical Loss Ratio (“MLR”), Selling, General, and Administrative Expense Ratio (“SG&A Expense Ratio”), Earnings from Operations, and Net Income (loss) attributable to Oscar Health Inc. to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, and make strategic decisions. We believe these operational and financial measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP.
Total Revenue
Total revenue includes Premium revenue (net of risk adjustment transfers), Investment income, and Other revenues. We believe Total revenue is an important metric to assess the growth of our business, as well as the earnings potential of our investment portfolio.
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MLR
MLR is a metric used to calculate medical expenses as a percentage of net premiums before ceded quota share reinsurance. The impact of the federal risk adjustment program is included in the denominator of our MLR. We believe MLR is an important metric to demonstrate the ratio of our costs to pay for the healthcare of our members to the net premium before ceded quota share reinsurance. MLRs in our products are subject to various federal and state minimum requirements.
SG&A Expense Ratio
The SG&A Expense Ratio reflects the Company’s Selling, general, and administrative expenses, as a percentage of Total revenue (net of risk adjustment transfers). We believe the SG&A Expense Ratio is useful to evaluate our ability to manage our overall selling, general, and administrative cost base.
Earnings (Loss) from Operations
Earnings (loss) from Operations is a primary metric for assessing operating performance. Earnings (loss) from Operations is the Company's Total revenue less Total operating expenses.
Net Income (Loss) attributable to Oscar Health, Inc.
Net earnings (loss) allocated to the Company after income (loss) attributable to noncontrolling interests is a key indicator of the Company’s profitability and operational efficiency, allowing management to evaluate performance and make informed decisions on strategic planning, cost management, and resource allocation.
Recent Developments, Trends and Other Key Factors Impacting Performance
Regulatory Developments and Trends
Our operations are subject to comprehensive and detailed federal, state, and local laws and regulations, which continue to rapidly evolve and change. Developments related to the regulatory regimes under which we operate have in the past impacted, and are expected to continue to impact, our results of operations. The following regulatory developments have impacted our operations during the periods presented in the financial statements contained elsewhere in this Quarterly Report on Form 10-Q, or are expected to impact our results of operations in future periods.
The ACA
The ACA established significant subsidies to support the purchase of health insurance by individuals, in the form of advanced premium tax credits (“APTCs”), available through Health Insurance Marketplaces. The American Rescue Plan Act (“ARPA”) increased the size of APTCs for 2021 and 2022, and the Inflation Reduction Act of 2022 renewed the enhanced APTCs for three years through the end of 2025. If Congress does not take action, the enhanced APTCs will expire at the end of 2025. If the enhanced APTCs are not renewed, insurance coverage could become unaffordable for certain individuals.
The Centers for Medicare & Medicaid Services (“CMS”) is increasingly focused on improving integrity in the Health Insurance Marketplace eligibility and enrollment process, and we expect this focus to continue. During the second half of 2024, CMS enacted new measures to respond to increases in unauthorized changes in consumer enrollments by agents and brokers and to reduce consumer burdens related to unauthorized enrollments. While these measures are important to prevent unauthorized enrollments, they may also make it more difficult for individuals to complete valid enrollments in new plans, switch from one plan to another, or obtain APTCs. In addition, on June 25, 2025, CMS issued a final rule that creates new processes to confirm member eligibility for APTCs, including a shortened timeframe for members to reconcile eligibility for APTCs to their tax returns, as well as other requirements related to ACA plan enrollment, including shorter open enrollment periods and the suspension of certain special enrollment periods (the “Program Integrity Rules”). The Program Integrity Rules become effective on August 25, 2025, with some provisions that will take effect in 2026 and 2027. Furthermore, on July 4, 2025, the President signed into law the One Big Beautiful Bill Act (the “OBBBA”) which, among other relevant matters, limits the eligibility of APTCs for certain populations, and requires additional verification procedures to confirm member eligibility for APTCs.
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The implementation of the Program Integrity Rules, the OBBBA, and the discontinuation of the enhanced APTCs (if not renewed at the end of 2025), will likely reduce overall participation in the Health Insurance Marketplaces, and any resulting market contraction could negatively impact market morbidity. For additional details on how these factors may impact Oscar, see “Risk Factors-Most Material Risks to Us-Our success and ability to grow our business depend in part on retaining and expanding our member base. If we fail to add new members or retain current members, or manage our membership growth appropriately to meet our business objectives, our business, revenue, operating results, and financial condition could be harmed” and “Risk Factors–Most Material Risks to Us–Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows” in this Quarterly Report on Form 10-Q and “Risk Factors–Most Material Risks to Us–Any changes to the ACA and its regulations could materially and adversely affect our business, results of operations, and financial condition” and “Business–Government Regulation–Ongoing Requirements and Changes to the ACA” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Medicaid redeterminations began on April 1, 2023 and CMS announced a Special Enrollment Period (“SEP”) that began March 31, 2023 and ended November 30, 2024 to facilitate enrollment in the ACA by individuals who lost Medicaid coverage under the redetermination process. While CMS announced in 2024 that all unwinding-related renewals for beneficiaries enrolled in Medicaid or the Children's Health Insurance Program (“CHIP”) must be completed no later than December 31, 2025, our understanding is that the majority of states substantially completed their unwinding processes in 2024. We believe these Medicaid redeterminations have previously contributed to increases in our membership, however, we anticipate that any future impact on our membership will not be as significant as the membership growth we previously experienced. We believe that members who have enrolled in the ACA through the Medicaid redetermination process are higher utilizers of care and have increased the overall morbidity of the Health Insurance Marketplace. For additional details, see “Risk Factors–Most Material Risks to Us–Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows” in this Quarterly Report on Form 10-Q and “Business–Government Regulation–Ongoing Requirements and Changes to the ACA” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Proposed Tariffs
The Trump administration has indicated that new tariffs may be imposed on a variety of products relevant to our business, including certain pharmaceutical products and ingredients and medical devices and supplies imported into the United States. If such tariffs are imposed, the potential impact could include, among other things, higher costs for medical providers and facilities, higher pharmaceutical prices, higher costs of medical devices, and supplies and shortages of certain medicines and medical supplies. Shortages in medicines and supplies may also impact the health of our members, which in turn may result in higher medical costs. The unprecedented nature of these types of tariffs, as well as uncertainty around their implementation, could impact our ability to accurately estimate and effectively manage the impact on our medical expenses, which in turn could adversely affect our results of operations and financial position. For additional details, see “Risk Factors-Most Material Risks to Us-Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows” in this Quarterly Report on Form 10-Q.
SEP Market Dynamics Developments and Trends
SEP or other market dynamics that drive enrollment and/or mix changes throughout the year may impact the per member levels of premiums, claims, and/or risk adjustment transfers. During the year ended December 31, 2024, the increase in our membership was due in part to an increase in member enrollments through SEP which impacted our MLR. Higher SEP growth in certain markets throughout 2024 may have contributed to the increase in our risk transfer payable for the year ended December 31, 2024 and the six months ended June 30, 2025.
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Members
Our membership is measured as of a particular point in time. Membership may change due to the pricing of, and benefits offered under, our plans both relative to our competitors and considered on a stand-alone basis, our expansion into or exiting of certain markets, and may vary throughout the year due to disenrollments, SEP, and other market dynamics that are in effect such as Medicaid redeterminations, enhancements, reductions or eliminations of APTCs, other legislative or regulatory actions, such as recent CMS initiatives to improve the integrity in the ACA eligibility and enrollment process, pre-enrollment verification procedures required by OBBBA, or other factors that cause the overall market to grow or decline.
Risk Adjustment
The risk adjustment programs in the markets we serve are administered federally by CMS and are designed to mitigate the potential impact of adverse selection and provide stability for health insurers. Under this program, each plan is assigned a risk score based upon demographic information and current year claims information related to its members. The risk score is used to adjust plan revenue to reflect the relative risk of the plan's enrolled population. We reevaluate our risk adjustment transfer estimates as new information and market data becomes available, until we receive the final reporting from CMS in later periods, up to twelve months in arrears. In July 2025 the Company received third-party reports, based on claims data through April 2025, providing estimates of the market risk score (a measure of morbidity) for the states where we participate in the ACA. As a result of this new data, the Company significantly increased its estimate of the risk adjustment transfer as of June 30, 2025.
Our risk transfer estimates are subject to a high degree of estimation and variability, and are affected by the relative risk of our members, and in the case of ACA, that of other insurers. The data that we rely upon to calculate these estimates includes data received from independent third parties. In addition, the data may be incomplete, can vary considerably from period to period, requires considerable judgment in interpretation, lacks context, and provides limited insight. Moreover, our risk transfer estimates are subject to change due to factors outside of our control, such as changes in legislation, regulations, regulatory enforcement, enrollment in government health plans, inflation, market size, market morbidity, the actions of our competitors, and other uncertainties. There is a higher degree of uncertainty associated with estimates of risk adjustment transfers earlier in the policy year or, in the case of SEP driven enrollment, throughout the policy year, resulting from the fact that risk scores are based on lagged claim data. There is additional uncertainty for both markets and blocks of business that experience outsized growth, compounded by the lack of credible experience data on the newly enrolling population, including SEP driven enrollees and new members moving from one government program to another. Furthermore, there is also uncertainty associated with changes in other carriers operations, which may impact the ultimate degree of market-level risk. Actual risk adjustment calculations and transfers have in the past materially differed, and could materially differ in the future, from our assumptions.
Claims Incurred
Our medical expenses are impacted by unit costs and utilization, as well as seasonal effects on medical costs, such as the utilization of deductibles and out-of-pocket maximums over the course of the policy year, which shift more costs to us in the second half of the year as we pay a higher proportion of covered claims costs, and the number of days and holidays in a given period. Our medical and pharmacy costs can also exhibit seasonality depending on selection effects or changes in the risk profile of our membership and the proportion of our membership that is new in the calendar year. The emergence of medical and pharmacy claims is influenced by the aforementioned drivers, and further mix shifts may continue to alter claims incurred patterns in future periods.
Seasonality
Our business is generally affected by the seasonal patterns of our member enrollment, medical expenses, and health plan mix shift and product design. SEP or other market dynamics that drive enrollment and/or mix changes throughout the year may impact the per member levels of premiums, claims, and/or risk adjustment transfers.
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Reinsurance
We believe our reinsurance agreements help us achieve important goals for our business, including risk management and capital efficiency. Our reinsurance agreements are contracted under two different types of arrangements: quota share reinsurance contracts and excess of loss (“XOL”) reinsurance contracts. In quota share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company’s losses in exchange for a corresponding percentage of premiums. In XOL reinsurance, the reinsurer agrees to assume all or a portion of the ceding company’s losses in excess of a specified amount. Under XOL reinsurance, the premium payable to the reinsurer is negotiated by the parties based on losses on an individual member in a given calendar year and their assessment of the amount of risk being ceded to the reinsurer. In the case of federal and state-run reinsurance programs, no reinsurance premiums are paid. The reinsurance agreements do not relieve us of our primary medical claims incurred obligations. Refer to “Note 9 - Reinsurance” included elsewhere in this Quarterly Report on Form 10-Q for a description of the accounting methods used to record our quota share reinsurance arrangements.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of the Company's significant accounting policies is included in “Note 2 - Summary of Significant Accounting Policies,” in our Annual Report on Form 10-K for the year ended December 31, 2024. Certain of our accounting policies are considered critical, as these policies require significant, difficult or complex judgments by management, often requiring the use of estimates about the effects of matters that are inherently uncertain. As of June 30, 2025, there were no significant changes to our critical accounting estimates from what was reported in our Annual Report on Form 10-K for the year ended December 31, 2024.
Components of our Results of Operations
Premium
Premium revenue includes direct policy premiums collected from our members and subsidies received from the federal government, net of risk adjustment transfers, and assumed policy premiums we earned as part of our reinsurance arrangement under our former Cigna+Oscar Small Group plan offering, and is net of ceded premium from XOL and run-off quota share reinsurance contracts accounted for under reinsurance accounting. The Company did not renew the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024.
Investment Income
Investment income primarily includes investment income, interest earned, and gains (losses) on our investment portfolio.
Other Revenues
Other revenues include revenue earned as part of services performed via the +Oscar platform, revenue share from virtual credit card rebates, revenue earned through the three companies acquired in May 2025, and sublease revenue.
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Medical
Medical expense primarily consists of both paid and unpaid medical expenses incurred to provide medical services and products to our members. Medical claims include fee-for-service claims, pharmacy benefits, capitation payments to providers, disputed provider claims, and various other medical-related costs. Under fee-for-service claims arrangements with providers, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Medical claims are recognized in the period healthcare services are provided. Unpaid medical expenses include claims reported and in the process of being settled, but that have not yet been paid, as well as healthcare costs incurred but not yet reported to us, which are collectively referred to as benefits payable or claim reserves. The development of the claim reserve estimate is based on actuarial methodologies that consider underlying claim payment patterns, medical cost inflation, historical developments, such as claim inventory levels and claim receipt patterns, and other relevant factors. The methods for making such estimates and for establishing the resulting liability are continuously reviewed and any adjustments are reflected in the period determined. Medical expense also reflects the net impact of our ceded reinsurance claims from XOL and run-off quota share reinsurance contracts accounted for under reinsurance accounting.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses primarily include distribution and servicing costs, premium taxes, exchange fees, other taxes and fees, employee-related expenses, costs of software and hardware, stock-based compensation, the impact of quota share reinsurance, and other administrative costs.
Other Expenses (Income)
Other expenses (income) consists primarily of miscellaneous expenses or income that are not core to our operations, including profit sharing arrangements with our co-branded health plans and changes in the fair value of financial instruments.
Income Tax Expense (Benefit)
Income tax expense (benefit) consists primarily of changes to our current and deferred federal and state tax assets and liabilities. Income taxes are recorded as deferred tax assets and deferred tax liabilities based on differences between the book and tax bases of assets and liabilities. Our deferred tax assets and liabilities are calculated by applying the current tax rates and laws to taxable years in which such differences are expected to reverse.
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to noncontrolling interests represents the share of the Company’s earnings allocated to the Company’s joint venture partner.
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Results of Operations
The following table sets forth our results of operations for the periods indicated:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Premium | $ | 2,803,444 | $ | 2,164,116 | $ | 5,799,265 | $ | 4,257,798 | ||||||||||||||||||||||||||||||||||||
| Investment income | 54,004 | 49,994 | 100,116 | 92,983 | ||||||||||||||||||||||||||||||||||||||||
| Other revenues | 6,497 | 5,231 | 10,827 | 10,865 | ||||||||||||||||||||||||||||||||||||||||
| Total revenue | 2,863,945 | 2,219,341 | 5,910,208 | 4,361,646 | ||||||||||||||||||||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||
| Medical | 2,552,973 | 1,708,722 | 4,812,624 | 3,263,496 | ||||||||||||||||||||||||||||||||||||||||
| Selling, general, and administrative | 534,485 | 435,206 | 1,017,244 | 829,368 | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 6,970 | 7,601 | 13,700 | 15,412 | ||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 3,094,428 | 2,151,529 | 5,843,568 | 4,108,276 | ||||||||||||||||||||||||||||||||||||||||
| Earnings (loss) from operations | (230,483) | 67,812 | 66,640 | 253,370 | ||||||||||||||||||||||||||||||||||||||||
| Interest expense | 5,847 | 5,991 | 11,841 | 11,893 | ||||||||||||||||||||||||||||||||||||||||
| Other expenses (income) | (2,794) | 872 | 124 | 2,050 | ||||||||||||||||||||||||||||||||||||||||
| Earnings (loss) before income taxes | (233,536) | 60,949 | 54,675 | 239,427 | ||||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | (5,045) | 4,637 | 7,660 | 5,633 | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | (228,491) | 56,312 | 47,015 | 233,794 | ||||||||||||||||||||||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | (130) | 105 | 105 | 219 | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Oscar Health, Inc. | $ | (228,361) | $ | 56,207 | $ | 46,910 | $ | 233,575 | ||||||||||||||||||||||||||||||||||||
| Medical Loss Ratio (MLR) | 91.1 | % | 79.0 | % | 83.0 | % | 76.7 | % | ||||||||||||||||||||||||||||||||||||
| SG&A Expense Ratio | 18.7 | % | 19.6 | % | 17.2 | % | 19.0 | % | ||||||||||||||||||||||||||||||||||||
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Premium
Premium revenue increased $639.3 million or 30% for the three months ended June 30, 2025, compared to the same period in 2024, and increased $1,541.5 million, or 36%, for the six months ended June 30, 2025, compared to the same period in 2024. This increase was driven by higher membership, partially offset by an increase in the net risk adjustment transfer accrual. Membership increased by 0.4 million, or 28%, primarily driven by above market growth during the 2025 Open Enrollment period.
The following table summarizes the Company’s membership by offering:
| As of June 30, | |||||||||||
| Membership by Offering | 2025 | 2024 | |||||||||
| Individual and Small Group | 2,017,058 | 1,522,432 | |||||||||
Cigna+Oscar (1) | 10,090 | 58,293 | |||||||||
Total Members (2) | 2,027,148 | 1,580,725 | |||||||||
(2) Represents effectuated members. Effectuated members are those who are actively enrolled in one of our plans and whose required premium payments have either been made or are within the payment grace period. A member covered under more than one of our health plans counts as a single member for the purposes of this metric.
Investment Income
Investment income increased $4.0 million or 8% for the three months ended June 30, 2025, compared to the same period in 2024, and increased $7.1 million, or 8%, for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to a larger asset base, partially offset by lower yield.
Medical Expenses and MLR
Medical expenses increased $844.3 million, or 49% for the three months ended June 30, 2025, compared to the same period in 2024, and increased $1,549.1 million, or 47%, for the six months ended June 30, 2025, compared to the same period in 2024. This increase was primarily due to increased membership and medical cost trend.
MLR increased for the three months and six months ended June 30, 2025, compared to the same periods in 2024, primarily driven by an increase in average market morbidity that resulted in an increase in the net risk adjustment transfer accrual.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Medical | $ | 2,552,973 | $ | 1,708,722 | $ | 4,812,624 | $ | 3,263,496 | |||||||||||||||
Less: Ceded quota share reinsurance claims(1) | — | (3,860) | — | (4,915) | |||||||||||||||||||
Net claims before ceded quota share reinsurance (A) | $ | 2,552,973 | $ | 1,712,582 | $ | 4,812,624 | $ | 3,268,411 | |||||||||||||||
| Premium | $ | 2,803,444 | $ | 2,164,116 | $ | 5,799,265 | $ | 4,257,798 | |||||||||||||||
Less: Ceded quota share reinsurance premiums (1) | — | (2,820) | — | (4,836) | |||||||||||||||||||
Net premiums before ceded quota share reinsurance (B) | $ | 2,803,444 | $ | 2,166,936 | $ | 5,799,265 | $ | 4,262,634 | |||||||||||||||
Medical Loss Ratio (A divided by B) | 91.1 | % | 79.0 | % | 83.0 | % | 76.7 | % | |||||||||||||||
(1)Represents prior period development for claims and premiums, respectively, ceded to reinsurers pursuant to quota share treaties accounted for under reinsurance accounting, which are in runoff. | |||||||||||||||||||||||
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Selling, General, and Administrative Expenses and SG&A Expense Ratio
Selling, general, and administrative expenses increased $99.3 million or 23% for the three months ended June 30, 2025, compared to the same period in 2024, and increased $187.9 million, or 23%, for the six months ended June 30, 2025, compared to the same period in 2024. This increase was primarily driven by higher membership year over year.
The SG&A Expense Ratio decreased 90 basis points for the three months ended June 30, 2025 compared to the same period in 2024. The SG&A ratio decreased 180 basis points year over year for the six months ended June 30, 2025, compared to the same period in 2024. The improvement was primarily due to lower exchange fee rates and greater fixed cost leverage, partially offset by the impact of higher risk adjustment as a percentage of premium.
Income Tax Expense (Benefit)
Our effective tax rate for the three months ended June 30, 2025 and 2024 was approximately 2.2% and 7.6%, respectively, and 14.0% and 2.4% for the six months ended June 30, 2025 and 2024, respectively.
Liquidity and Capital Resources
Overview
We maintain liquidity at two levels of our corporate structure, through our health insurance subsidiaries (any subsidiary of Oscar Health, Inc. that has applied for or received a license, certification or authorization to sell health plans by any state Department of Insurance, Department of Financial Services, Department of Health, or comparable regulatory authority) and through our holding company (our parent company, Oscar Health, Inc., on a standalone basis (“Parent”) and subsidiaries excluding our health insurance subsidiaries).
The majority of the assets held by the holding company are in the form of cash and cash equivalents and investments. As of June 30, 2025 and December 31, 2024, total cash and cash equivalents and investments held by the holding company were $205.1 million and $189.8 million, respectively, of which $12.9 million and $12.8 million was restricted as of June 30, 2025 and December 31, 2024, respectively.
The majority of the assets held by our health insurance subsidiaries are in the form of cash and cash equivalents and investments. As of June 30, 2025 and December 31, 2024, total cash and cash equivalents and investments held by our health insurance subsidiaries were $5,208.9 million and $3,808.0 million, respectively, of which $18.2 million and $18.0 million, respectively, was on deposit with regulators as required for statutory licensing purposes. These amounts are classified as restricted deposits on the balance sheet.
Our health insurance subsidiaries’ states of domicile have statutory minimum capital requirements that are intended to measure capital adequacy, taking into account the risk characteristics of an insurer’s investments and products. The combined statutory capital and surplus of our health insurance subsidiaries was estimated to be approximately $1.2 billion for June 30, 2025 and December 31, 2024, which was in compliance with and in excess of the minimum capital requirements for each period. The health insurance subsidiaries historically have required capital contributions from Parent to maintain minimum levels. The health insurance subsidiaries in aggregate exceeded the minimum statutory RBC requirement by $734 million as of December 31, 2024 and are estimated to have approximately $579 million of excess capital as of June 30, 2025. The health insurance subsidiaries may be subject to additional capital and surplus requirements in the future, as a result of factors such as increasing membership and medical costs or changes in risk adjustment transfer estimates, which may require us to incur additional indebtedness, sell capital stock, or access other sources of funding in order to fund such requirements. During periods of increased volatility, adverse securities and credit markets, including those due to rising interest rates, may exert downward pressure on the availability of liquidity and credit capacity for certain issuers, and any such funding may not be available on favorable terms, or at all.
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As certain of our health insurance subsidiaries have become profitable and to the extent their levels of statutory capital and surplus exceed minimum regulatory requirements, we may make periodic requests for dividends and distributions from our subsidiaries to fund our operations or seek to enter into transactions or structures that enable us to efficiently deploy this excess capital, which may or may not require approval by our regulators. During the six months ended June 30, 2025 and June 30, 2024, our health insurance subsidiaries made loan repayments of $10.0 million and $18.0 million to Parent, respectively.
During the six months ended June 30, 2025 and June 30, 2024, respectively, Parent made $19.3 million and $28.0 million of capital contributions to the health insurance subsidiaries. Our health insurance subsidiaries also utilize quota share reinsurance arrangements to reduce our minimum capital and surplus requirements, which are designed to enable us to efficiently deploy capital to fund our growth. We estimate that had we not had any quota share reinsurance arrangements in place, the health insurance subsidiaries would have been required to hold approximately $655.0 million and $553.8 million of additional capital as of June 30, 2025 and December 31, 2024, respectively, which the Parent would have been required to fund to the extent the applicable insurance subsidiary did not have excess capital to cover the requirement.
Short-Term Cash Requirements
The Company’s cash requirements within the next twelve months include benefits payable, risk adjustment transfer payables, current lease liabilities, interest payable on debt, other current liabilities and purchase commitments and other obligations. We expect the cash required to meet these obligations to be primarily funded by cash available for general corporate use, cash flows from current operations, and/or the realization of current assets, such as accounts receivable. Based on our current forecast, we believe the Company's cash, cash equivalents, and investments, not including restricted cash, will be sufficient to fund our operating requirements for at least the next twelve months.
Long-Term Cash Requirements
Our long-term cash requirements under our various contractual obligations and commitments include operating leases. We expect the cash required to meet our long-term obligations to be primarily generated through future cash flows from operations. See “Note 13 - Leases” in our Annual Report on Form 10-K for the year ended December 31, 2024 for further detail of our obligations and the timing of expected future payments.
Convertible Senior Notes
On February 3, 2022, we issued $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC, and Tenere Capital LLC (the “Initial Purchasers”). In connection with the sale and issuance of the 2031 Notes, on January 27, 2022, we entered into an investment agreement with the Initial Purchasers (the “Investment Agreement”) and on February 3, 2022, we entered into an indenture with U.S. Bank, as Trustee (the “Indenture”). The 2031 Notes bear interest at a rate of 7.25% per annum, payable in cash, semi-annually in arrears on June 30 and December 31 of each year, commencing on June 30, 2022. The 2031 Notes will mature on December 31, 2031, subject to earlier repurchase, redemption, or conversion.
The holders of the 2031 Notes may require us to repurchase the 2031 Notes for cash, upon a fundamental change (as defined in the Indenture) or on June 30, 2027 and each anniversary thereof until June 30, 2030. In addition, we may redeem the 2031 Notes on or after December 31, 2026 if certain Class A common stock sales price and other conditions are satisfied.
The 2031 Notes may be converted at the election of the holders under certain circumstances, including if we call the 2031 Notes for redemption or upon satisfaction of a Class A common stock sale price condition. During the quarterly period ended June 30, 2025, the Class A common stock sale price condition was satisfied. As a result, the 2031 Notes are convertible during the third quarter of 2025 at the option of the holder. As of the date of this Quarterly Report on Form 10-Q, the 2031 Notes have not been converted. Upon conversion, the 2031 Notes will be settled, at the Company’s election, in shares of Class A common stock, cash, or a combination of cash and shares of Class A common stock, unless an Initial Purchaser of the 2031 Notes elects to receive the consideration due upon conversion solely in shares of Class A common stock pursuant to the terms of the Investment Agreement.
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For more information on our 2031 Notes, including details relating to repurchase, redemption and conversions of the 2031 Notes, see “Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Convertible Senior Notes” and “Note 9 - Debt” to our Consolidated Financial Statements, each in our Annual Report on Form 10-K for the year ended December 31, 2024, and, “Note 8 – Debt” to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Revolving Credit Facility
On December 28, 2023, we entered into a third amendment to our senior secured credit agreement with Wells Fargo Bank, National Association, as lender and administrative agent, and certain other lenders party thereto from time to time (collectively, the “Lenders”), and Oscar Management Corporation, as a subsidiary guarantor, which amended the senior secured credit agreement, dated as of February 21, 2021 (as previously amended by the First Amendment to Credit Agreement, dated as of January 27, 2022 and the Second Amendment to Credit Agreement, dated as of July 21, 2023, the “Amended Credit Agreement”). The Amended Credit Agreement provides for a revolving loan credit facility (the “Revolving Credit Facility”) in the aggregate principal amount of $115.0 million, with proceeds to be used for general corporate purposes of the Company.
The Revolving Credit Facility is available for the Company to borrow under until December 28, 2025, provided the Company is in compliance with the restrictive and financial covenants contained therein, including financial covenants to maintain minimum thresholds related to direct policy premiums, Consolidated Adjusted EBITDA (as defined in the Revolving Credit Facility), and liquidity, as well as a maximum medical loss ratio. As of June 30, 2025, there were no outstanding borrowings under the Revolving Credit Facility.
For more information on our Revolving Credit Facility, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility in our Annual Report on Form 10-K for the year ended December 31, 2024, and “Note 8 – Debt” to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Investments
We generally invest our cash in U.S. Treasury instruments, federal and state agency securities, investment grade corporate bonds, and asset backed securities to improve our overall investment return. These investments are purchased pursuant to board-approved investment policies that reflect our obligations under our credit agreement and conform to applicable state laws and regulations.
Our investment policies are designed to provide liquidity, preserve capital, and optimize the total return on invested assets. These policies also align with the constraints of our credit agreement and state regulations governing the types of investments our health insurance subsidiaries can hold. These investment policies require that our investments in U.S. corporate bonds and asset backed securities have final maturities of no more than five years from the date of issuance and U.S. federal and state government obligations have final maturities of no more than seven years from the settlement date. Professional portfolio managers operating under documented guidelines manage our investments and a portion of our cash equivalents. Our portfolio managers are directed to obtain our prior approval before selling investments in a loss position.
Net investment income on a consolidated basis was $54.0 million and $50.0 million for the three months ended June 30, 2025, and 2024, respectively, and $100.1 million and $93.0 million for the six months ended June 30, 2025 and 2024, respectively. Net investment income for our health insurance subsidiaries was $51.7 million and $47.2 million for the three months ended June 30, 2025 and June 30, 2024, respectively, and $96.1 million and $87.5 million for the six months ended June 30, 2025, and June 30, 2024, respectively.
Our restricted investments consist primarily of cash and cash equivalents and U.S. Treasury securities; we have the ability to hold such restricted investments until maturity. The Company maintains cash and cash equivalents and investments on deposit or pledged to various state agencies as a condition for licensure. We classify our restricted deposits as long-term given the requirement to maintain such assets on deposit with regulators.
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Summary of Cash Flows
Our cash flows used in operations may differ substantially from our net income due to non-cash charges or due to changes in balance sheet accounts.
The timing of our cash flows from operating activities can also vary among periods due to the timing of payments made or received. Some of our payments and receipts, including loss settlements, rebates from our pharmacy benefit manager, and subsequent reinsurance receipts, can be significant. Therefore, their timing can influence cash flows from operating activities in any given period. The potential for a large claim under an insurance or reinsurance contract means that our health insurance subsidiaries may need to make substantial payments within relatively short periods of time, which would have a negative impact on our operating cash flows.
Our primary operating cash flow sources are premiums and investment income. Our primary operating cash flow uses are payments for claims, risk adjustment transfers, and operating expenses, including interest expense. For the six months ended June 30, 2025, net cash provided by operating activities was $1,387.6 million as compared with $1,131.5 million provided by operating activities for the same period in 2024. The increase was primarily due to higher premium received and reinsurance recoverables, partially offset by higher claim disbursements and increased premium tax payments.
Cash flows from investing activities primarily include the purchase and disposition of financial instruments. For the six months ended June 30, 2025, net cash used in investing activities was $342.4 million as compared to net cash used in investing activities of $778.2 million for the same period in 2024. The change was primarily due to a reduction in the purchases of securities, partially offset by a lower level of maturing investment.
Cash flows from financing activities may include proceeds from the issuance of debt securities, proceeds from stock option exercises, and tax payments related to the net settlement of share-based awards. For the six months ended June 30, 2025, net cash provided by financing activities was $27.0 million as compared to $46.0 million for the same period in 2024. The decrease was primarily due to a reduction in proceeds from stock option exercises.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily attributable to potential changes in interest rates and/or inflation and the resulting impact on investment income and interest expense. We do not hold financial instruments for trading purposes.
Interest Rate Risk
We are subject to interest rate risk in connection with the fair value of our investment portfolio, which consists of U.S. Treasury and agency securities, corporate notes, and certificates of deposit. Our primary market risk exposure is driven by changes to Federal fund effective rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors, and other factors beyond our control. Assuming a hypothetical and immediate 1% increase in interest rates at June 30, 2025, the fair value of our investments would decrease by approximately $47.1 million. Any declines in interest rates over time would reduce our investment income.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The information required under this Part II, Item 1 is set forth in “Note 12 - Commitments and Contingencies” to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, results of operations, financial condition or cash flows.
Item 1A. Risk Factors
Except as set forth in the amended and restated risk factors below, there have been no material changes to the risk factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2024.
Our success and ability to grow our business depend in part on retaining and expanding our member base. If we fail to add new members or retain current members, or manage our membership growth appropriately to meet our business objectives, our business, revenue, operating results, and financial condition could be harmed.
We currently derive substantially all of our revenue from direct policy premiums, which are primarily driven by the number of members covered by our health plans. As a result, the size of our member base is critical to our success. We have experienced significant member growth since we commenced operations; however, we may not be able to maintain this growth or manage our membership growth appropriately to meet our business objectives, and our member base could decrease rapidly or shrink over time.
There are many factors that could negatively affect our ability to retain existing members and expand our member base, many of which are beyond our direct control, including if:
•we are unable to remain competitive on member experience, pricing, and insurance coverage options;
•we are unable to gain access to quality providers;
•we are unable to develop or maintain competitive provider networks, or maintain adequate networks that comply with regulatory requirements and standards;
•insurance brokers that we rely on to build our member base are unable to market our insurance products effectively;
•we fail to attract brokers to sell our insurance products or lose important broker relationships to our competitors or otherwise, including in circumstances where we require brokers to use different enrollment services vendors;
•the enhanced advanced premium tax credits “APTCs” under the American Rescue Plan Act “ARPA” are not renewed after 2025, or are otherwise eliminated or reduced, or other APTCs or subsidies under the ACA are eliminated or reduced;
•regulatory or legislative actions to improve the integrity in the ACA eligibility and enrollment process, including periodic data matching operations and rules that make it more difficult for members to enroll in new plans, switch from one plan to another, or obtain APTCs, such as the CMS Program Integrity Rule and the OBBBA;
•we increase pricing as a result of changes or developments in the Health Insurance Marketplaces, including as a result of increased morbidity in the market;
•our competitors or new market entrants successfully mimic our innovative product offerings or our full stack technology platform;
•we are unable to maintain licenses and approvals, or there are material modifications or restrictions on our ability to offer insurance in our current markets or to participate on Health Insurance Marketplaces, obtain licenses and approvals to offer insurance in new markets, or to otherwise expand our plan offerings in an economically sustainable manner;
•we fail to continue to offer differentiated and competitive products, or there are regulatory actions that limit the types of plans that can be offered, such as the Notice of Benefit and Payment Parameters;
•initiatives designed to improve member and provider experience, including the use of AI technologies or other new technologies, are unsuccessful or discontinued, whether as a result of actions by us, our competitors, regulators, or other third parties;
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•as a result of changes in law or otherwise, our competitors participate in the individual market to a greater extent than they have previously;
•there is an initiation of a new Special Enrollment Period (“SEP”), termination of an existing SEP, or other unexpected healthcare market developments, including in response to legislative, regulatory or political developments and executive orders;
•our digital platform experiences technical or other problems or disruptions that frustrate the experience of members or providers or other third-party partners;
•we or our partners or other third parties with whom we collaborate sustain a cyber-attack or suffer privacy or data security breaches;
•we experience unfavorable shifts in perception of our digital platform or other member service channels;
•we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate;
•our strategic partners terminate or fail to renew our current contracts or we fail to enter into contracts with new strategic partners; or
•our efforts to partner with ICHRA platforms to transition small, mid-sized and large employers to the individual market where their employees can choose an Oscar product are not successful, or take significantly more time than expected to be successful.
For example, CMS is increasingly focused on improving integrity in the Health Insurance Marketplace eligibility and enrollment process, and we expect this focus to continue. During the second half of 2024, CMS enacted new measures to respond to increases in unauthorized changes in consumer enrollments by agents and brokers and to reduce consumer burdens related to unauthorized enrollments, and these measures may make it more difficult for members to enroll in new plans or switch from one plan to another. In addition, on June 25, 2025, CMS issued a Program Integrity Rule which creates structured eligibility verification processes, shortens the annual open enrollment period, requires APTC eligibility reconciliation against income tax returns, and pauses the SEP for individuals making <150% Federal Poverty Level (“FPL”). For instance, starting in 2026 with respect to policy year 2027, the rule changes the annual open enrollment period (“OEP”) for all individual market coverage to run from November 1 through December 15 preceding the coverage year, instead of through January 15 of the coverage year. Although we expect a shortened OEP to result in a reduction in the number of enrolled individuals in the Health Insurance Marketplace, we are unable to predict with certainty the magnitude of the impact to the overall Health Insurance Marketplace or to our future membership. In addition, the rule creates stricter income eligibility verification processes commencing August 25, 2025, with most sunsetting at the end of 2026, including annual income data matching issues (“DMIs”) when applicants attest to income above 100 percent of the FPL, but trusted data sources show income below 100 percent of the FPL. Furthermore, the rule removes an automatic 60-day extension for applicants to provide documentation to verify household income when there is an income inconsistency, and requires applicants to annually reconcile received APTCs against allowable amounts as determined by their tax returns. While we expect these stricter income eligibility verification processes and other restrictions to result in a number of individuals in states where we operate to no longer qualify for APTCs and therefore reduce the number of enrolled individuals in the Health Insurance Marketplace, we are unable to predict with certainty the magnitude of the impact to the overall Health Insurance Marketplace or to our future membership.
The OBBBA enacted several provisions that may impact the number of Health Insurance Marketplace enrollees and, by extension, the size of our member population. These include ending the APTCs for individuals who enroll in plans via the SEP with income below 150% of the FPL, prohibiting automatic re-enrollment for tax year 2028, and eliminating APTC eligibility for some formerly covered individuals (such as refugees and other immigrant populations). While we expect these provisions to result in a reduction in the number of enrolled individuals in the Health Insurance Marketplace, we cannot predict with certainty the magnitude of the impact on our membership or our business.
The Program Integrity Rules, as well as the OBBBA, could have a material impact on the Health Insurance Marketplace and could also have a material impact on our business, revenue, operating results, and financial condition.
CMS recently announced the resumption of periodic data matching operations at least twice per calendar year to decrease the number of people simultaneously enrolled in Medicaid/Children's Health Insurance Program “CHIP” and a subsidized ACA health plan. These initiatives include sharing lists of dually-enrolled individuals with states and state-based exchanges, and for those dually enrolled in Medicaid/CHIP and a federally-facilitated exchange plan, directly notifying them so they can rectify their enrollment status. These provisions may result in a reduction in the number of enrolled individuals in the Health Insurance Marketplace, but we cannot predict with certainty the magnitude of the impact on our membership, overall market morbidity, or our business.
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We operate in a highly competitive environment and some of the health insurers with which we compete have greater financial and other resources, offer a broader scope of products, and may be able to price their products more competitively than ours. Many of our competitors also have relationships with more providers and provider groups than we do, and can offer a larger network or obtain better unit cost economics. Our inability to overcome these challenges could impair our ability to attract new members and retain existing members, and could have a material adverse effect on our business, revenue, operating results, and financial condition. Additionally, if we are not able to grow our membership, we may be unable to attract additional partners to our +Oscar platform or maintain existing +Oscar partnerships, which could impact our ability to execute our growth strategy.
Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows.
We set our premiums in advance of each policy year based on competitive factors in each market in which we participate as well as a projection of future expenses. As a result, the profitability of our insurance business depends, to a significant degree, on our ability to accurately estimate and effectively manage our medical expenses and administrative costs.
Numerous factors impact our ability to accurately estimate and control our medical expenses, including if the underlying data used as the basis for our estimates is incomplete or doesn’t correctly represent the health of our members. Furthermore, many of these factors are not within our control, including, but not limited to:
•changes in healthcare regulations and practices, including subregulatory guidance, regulations, or statutes that govern individual plans, or the Health Insurance Marketplaces;
•the impact on the morbidity of our members or the broader market member population from ongoing regulatory actions to improve the integrity in the ACA eligibility and enrollment process (including the Program Integrity Rules and the OBBBA), the potential elimination of enhanced APTCs, and Medicaid redeterminations;
•increases in the costs of healthcare facilities and services, medical devices and supplies, pharmaceutical products and ingredients, including due to the introduction and adoption of new or costly medical technologies and pharmaceuticals, the impact of legislative or regulatory actions, including the imposition of tariffs on certain pharmaceuticals or other foreign imports, or macroeconomic inflationary effects;
•the impact on the morbidity of our members or the broader market member population from any shrinkage in the Health Insurance Marketplace that results from price increases by us or our competitors;
•changes in purchase discounts or pharmacy volume rebates received from drug manufacturers and wholesalers, or the guaranteed minimum discounts or rebates we agree to with the pharmacy benefit manager that negotiates and collects such discounts and rebates on our behalf;
•continued increases in broker fees due to the proportion of broker-acquired business continuing to increase in line with the macro trend in the Health Insurance Marketplace of fewer members signing up directly on exchanges;
•the broader competitive landscape, including new membership resulting from other health insurers exiting our markets or changing their pricing strategies, initiation of new SEPs and general expansion of the individual health insurance market;
•lack of credible data in new regions or with respect to new plan offerings or newly enrolling member populations;
•changes in the utilization of prescription drugs, medical services or other covered items or services, including changes in member utilization patterns ahead of potential lapses in coverage due to regulatory change;
•changes in our member demographic mix, the geographic concentration of our members, and the distribution of members among our plans;
•increased incidences or acuity of high dollar claims related to catastrophic illnesses or medical conditions, including claims for which we may not have adequate reinsurance coverage;
•changes to, or reductions of, our utilization management functions, such as preauthorization of services, concurrent review or requirements for physician referrals;
•the occurrence of natural disasters, terrorism, public health emergencies, major epidemics and pandemics; and
•provider or broker fraud.
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The Consolidated Appropriations Act of 2023 delinked Medicaid redeterminations from the end of the PHE for COVID-19, and Medicaid redeterminations were required to begin by April 1, 2023. Although redeterminations were expected to conclude by June 2024, CMS directed certain states to temporarily pause procedural terminations while they addressed issues in the renewal process that led to increased procedural disenrollments. CMS also announced an SEP that began March 31, 2023 and ended November 30, 2024 to facilitate enrollment in the ACA by individuals who lost Medicaid coverage under the redetermination process. Data from CMS on Medicaid redeterminations showed significant increases in ACA plan enrollments among consumers in 2023 and 2024 who lost Medicaid or CHIP coverage. While CMS announced in 2024 that all unwinding-related renewals for beneficiaries enrolled in Medicaid or CHIP must be completed no later than December 31, 2025, our understanding is that the majority of states had substantially completed their unwinding processes in 2024. We anticipate that any future impact on our membership in connection with ACA enrollments due to the unwinding of the Medicaid continuous enrollment condition will not be as significant as the membership growth we experienced in plan year 2024. We also believe that members who have enrolled in the ACA through the Medicaid redetermination process are higher utilizers of care and have increased the overall morbidity of the Health Insurance Marketplace. However, we cannot predict ACA plan enrollment patterns and the potential impact of recent and future enrollments on market morbidity, and the related impact on our underwriting margin, risk adjustment payables and MLR is therefore uncertain.
Due to the time lag between when services are actually rendered by providers and when we receive, process, and pay a claim for those services, our medical expenses include a provision for claims incurred but not paid. Given the uncertainties inherent in making estimates for such provisions, there can be no assurance that our claims liability estimates will be adequate, and any adjustments to these estimates may unfavorably impact, potentially in a material way, our reported results of operations and financial condition. Further, our inability to estimate our claims liability may also affect our ability to take timely corrective actions, further exacerbating the extent of any adverse effect on our results.
We also incur substantial administrative costs, particularly distribution costs, the costs of scaling and improving our operations, and the costs of hiring and retaining personnel. External factors, including general economic conditions such as inflation and unemployment levels and federal and state legislative and regulatory actions, are generally beyond our control and could further reduce our ability to accurately estimate and effectively control our administrative expenses, including the cost of our third-party vendors. Furthermore, regulatory changes or developments may require us to change our existing practices with respect to broker commissions and could potentially result in a substantial increase in related costs or limit our ability to manage those costs in the future. Any such increase in costs could cause our actual results to differ, potentially materially, from our prior expectations. As a result of our market expansion, expansion of our plan offerings and growth of our membership, our anticipated medical expenses and administrative costs are subject to additional uncertainty.
From time to time in the past, our actual results have varied from those expected, particularly in times of significant changes in the number of our members or when we commence or exit operations in a new state or region, and we may experience similar variance in the future. If it is determined that our estimates are significantly different from actual results, our results of operations and financial position could be adversely affected.
The result of risk adjustment programs may impact our revenue, add operational complexity, and introduce additional uncertainties that have a material adverse effect on our results of operations, financial condition, and cash flows.
The individual and small group markets we serve, and the Medicare Advantage markets we formerly served, employ risk adjustment programs that impact the revenue we recognize for our enrolled membership. We reassess the estimates of the risk adjustment settlements each reporting period and any resulting adjustments are made to premium revenue.
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As a result of the variability in the mechanics of the program itself, or of certain factors that go into the development of the risk transfers we recognize, such as risk scores, and other market-level factors where applicable, the actual amount of revenue could be materially more or less than our estimates. The data that we rely upon to calculate these estimates includes data received from independent third parties. In addition, the data may be incomplete, can vary considerably from period to period, requires considerable judgment in interpretation, lacks context and provides limited insight. Moreover, our estimates are subject to change due to factors outside of our control, such as changes in legislation, regulations, regulatory enforcement, enrollment in government health plans, inflation, market size, market morbidity, the actions of our competitors, and other uncertainties. Consequently, our estimates of our health plans’ risk scores for any period, our estimates of the risk scores for the markets in which we participate, and any resulting change in our accrual of risk adjustment transfers related thereto, has had a negative impact in the past and could in the future have a material adverse effect on our results of operations, financial condition, and cash flows. For example, as a result of third-party reports received in July 2025 that showed that average ACA marketplace risk scores have increased substantially in 2025 based on claims data through April 2025, we materially adjusted our risk adjustment transfer estimates for 2025. Furthermore, a significant change in our risk adjustment transfer estimates could require us to contribute additional capital to our insurance subsidiaries to meet statutory capital requirements. We may not be able to fund the increased capital contribution requirements with our available cash resources on a timely basis, or at all and may need to incur indebtedness or issue additional capital stock. In the event we need access to capital for such purposes, our ability to obtain such capital may be limited and may come at significant cost and could require us to raise capital during periods where additional capital is not available on favorable terms, or at all.
The data provided to CMS to determine our risk scores are subject to audit by CMS for several years after the annual settlements occur. Accordingly, we may continue to be subject to audits related to the Medicare Advantage plans that we historically offered. If the risk adjustment data we submit are found to incorrectly overstate the health risk of our members, we may be required to refund funds previously received by us and/or be subject to penalties or sanctions, including potential liability under the FCA, which could be significant and would reduce our revenue in the year that repayment or settlement is required. Further, if the data we provide to CMS incorrectly understates the health risk of our members, we might be underpaid for the care that we must provide to our members, which could have a negative impact on our results of operations and financial condition.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a) None.
(b) None.
(c) During the three months ended June 30, 2025, no director or “officer” (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted terminated
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Item 6. Exhibits
| Incorporated by Reference | Filed/ Furnished Herewith | ||||||||||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | ||||||||||||||||||||||||||||||
| 3.1 | 8-K | 001-40154 | 3.1 | 3/8/2021 | |||||||||||||||||||||||||||||||
| 3.2 | 8-K | 001-40154 | 3.2 | 3/8/2021 | |||||||||||||||||||||||||||||||
| 4.1 | S-1/A | 333-252809 | 4.1 | 2/22/2021 | |||||||||||||||||||||||||||||||
| 31.1 | * | ||||||||||||||||||||||||||||||||||
| 31.2 | * | ||||||||||||||||||||||||||||||||||
| 32.1 | ** | ||||||||||||||||||||||||||||||||||
| 32.2 | ** | ||||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document | * | |||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | * | |||||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and embedded within Exhibit 101) | * | |||||||||||||||||||||||||||||||||
* Filed herewith.
** Furnished herewith.
43
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| OSCAR HEALTH, INC. | ||||||||
Date: August 7, 2025 | By: | /s/ Mark T. Bertolini | ||||||
| Mark T. Bertolini | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Date: August 7, 2025 | By: | /s/ R. Scott Blackley | ||||||
| R. Scott Blackley | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
Date: August 7, 2025 | By: | /s/ Victoria Baltrus | ||||||
| Victoria Baltrus | ||||||||
| Chief Accounting Officer | ||||||||
| (Principal Accounting Officer) | ||||||||
44
Exhibit 31.1
CERTIFICATION
I, Mark T. Bertolini, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Oscar Health, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 7, 2025 | By: | /s/ Mark T. Bertolini | ||||||
| Mark T. Bertolini | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 31.2
CERTIFICATION
I, R. Scott Blackley, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Oscar Health, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 7, 2025 | By: | /s/ R. Scott Blackley | ||||||
| R. Scott Blackley | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Oscar Health, Inc. (the “Company”) for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 7, 2025 | By: | /s/ Mark T. Bertolini | ||||||
| Mark T. Bertolini | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Oscar Health, Inc. (the “Company”) for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 7, 2025 | By: | /s/ R. Scott Blackley | ||||||
| R. Scott Blackley | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||