Oscar Health (OSCR) is attracting considerable attention in the health insurance market, bolstered by a remarkable shift toward financial sustainability. After operating for several years as a high-growth startup without profitability, Oscar recorded its first full year of net income in 2024, confirmed by strong results in the first quarter of 2025. Investors are now keen to see whether Oscar’s technology-driven approach can offer a competitive advantage and support ongoing growth.
Founded in 2012, Oscar Health aims to disrupt traditional health insurance by leveraging a comprehensive technology platform that prioritizes consumer experience. The company provides Affordable Care Act (ACA) plans across 18 states, recently expanding its membership by 62% in 2024 and reaching approximately 2.04 million members by early 2025. This growth has been facilitated by entering new markets while also enhancing its offerings in existing ones.
Oscar’s model centers on a digital-first approach, featuring a user-friendly mobile app that enhances access to healthcare services, including telemedicine and transparent pricing tools. This user-centric design is reflected in the company’s impressive Net Promoter Score (NPS) of 66, significantly higher than industry averages, indicating strong customer loyalty and satisfaction.
Innovatively, Oscar has developed the +Oscar platform, which offers operational support to regional health plans. This strategic choice not only diversifies revenue streams beyond insurance premiums but increases operational efficiency for their partners, allowing them to compete more effectively.
The health insurance market, estimated at $1.60 trillion in 2022, is expected to grow to $2.54 trillion by 2030, with ACA plans playing a key role. While Oscar’s rapid enrollment growth stands out against a backdrop of larger insurers retreating from ACA exchanges, it faces challenges such as subsidy expirations and competitive pressures. Recent volatility in Oscar’s stock, including a near 18% dip in early 2025, reflects concerns about the stability of its growth as it navigates a challenging landscape.
Financially, Oscar’s revenues surged to $9.2 billion in 2024, a significant increase driven by new members during the enrollment period. The company’s management continues to focus on improving operational efficiency, evidenced by a decrease in the Selling, General, and Administrative (SG&A) Expense Ratio to 15.8% in Q1 2025.
While Oscar enjoys a strong market position, potential risks remain, including dependency on subsidies that may expire in 2025 and stiff competition from larger incumbents. The company’s recent decision to exit less profitable segments, such as Medicare Advantage, indicates a strategic pivot toward stability in the ACA market.
One hopeful aspect of Oscar’s trajectory is its technological innovation and commitment to consumer experience, which could foster sustained membership growth and profitability if market conditions remain favorable. Furthermore, the possibility of extended subsidies could provide a significant boost, facilitating continued growth and potentially higher earnings.
Oscar Health is positioning itself for future challenges and opportunities. While the road ahead may have obstacles, the strengths seen in their operational approach and customer engagement could pave the way for success in the health insurance arena.