The U.S. health insurance industry benefits from diversified, cost-effective plans that generate steady premium income and support contract renewals. However, tighter Medicaid eligibility and lower Affordable Care Act (ACA) enrollment could put pressure on membership and reimbursements. Demand for Medicare products should remain strong as the population ages, driving enrollment and premium growth. Meanwhile, investments in telehealth, AI, cloud computing and data analytics are enhancing efficiency and patient engagement despite near-term costs. Strategic M&A also supports market expansion and operational diversification.
Against this backdrop, let’s assess which company is better positioned with sustainable long-term prospects: Oscar Health OSCR or Centene Corporation CNC.
Oscar Health is a leading healthcare technology company built around a full-stack technology platform. It is well-positioned for sustained growth as it strengthens its presence in the expanding U.S. individual health insurance market.
Centene has established itself as a national leader in healthcare services. It primarily provides a set of services to government-sponsored healthcare programs, while also serving underinsured and uninsured individuals through member-focused services.
The Case for OSCR
Structural shifts in employment—including the rise of gig work, part-time roles, self-employment, and early retirement—are fueling demand for portable health insurance outside traditional employer-sponsored plans. Oscar Health is well-placed to capture this shift through its differentiated technology platform, which integrates plan design, member engagement, care navigation, claims processing, and provider management. Its Individual Coverage Health Reimbursement Arrangements, Lucie Health marketplace and Trove Group further extend growth opportunities beyond core insurance.
Strong membership growth reflects rising adoption of Oscar's offerings. Membership reached 2.96 million as of June 30, 2026, up 46% year over year, while second-quarter revenues jumped 70% to $4.88 billion on membership gains and premium-rate increases. Oscar expects full-year 2026 revenues of $18.7–$19.0 billion, underscoring its expanding scale in the individual insurance market.
The company plans to enter over 150 additional metropolitan statistical areas by 2027, with disciplined pricing, consumer-focused products, and a scalable technology platform expected to sustain growth in the ACA marketplace. Oscar's strategy also aligns with broader healthcare trends—rising costs, consumerization, digitization, and personalization—positioning it for a potentially durable competitive edge as the industry evolves.
Management targets a 20% revenue CAGR through 2027 and a 5% operating margin next year, with technology and AI initiatives, fixed-cost leverage, and lower risk-adjustment expenses as a share of premiums already improving the expense ratio.
Oscar's financial position has also strengthened, with roughly $4.08 billion in cash and equivalents and $6.08 billion in investments as of June 30, 2026, against long-term debt of just $432 million—providing flexibility to meet capital requirements, fund technology investment, and support continued growth.
The Case for CNC
Demand for Centene's health plans should remain structurally supported by aging populations, growing Medicaid outsourcing, and persistent need for affordable individual coverage. Following a challenging 2025, the company is showing durable earnings recovery, driven by disciplined cost and medical management. Profitability stabilized faster than investors anticipated, corrective Marketplace pricing began gaining traction, and Centene pared back exposure to inadequately priced plans.
The company is also reshaping its membership mix. While total membership declined to 25.9 million at quarter-end as Centene restructured its book, prescription drug plan membership rose 12.2% year-over-year and Individual and Commercial Group membership climbed 10.5%, reflecting targeted growth in select segments.
Centene is bolstering fraud prevention and payment integrity through AI-driven analytics that flag unusual claims earlier and strengthen oversight, while also applying advanced analytics to medical-cost forecasting, pricing and operating decisions. The company continues working with states to secure rates better aligned with member needs, utilization trends, and post-redetermination risk profiles. Combined with firmer Marketplace pricing and tighter cost discipline, these efforts point toward a clearer path to margin stability — reflected in the second-quarter health benefits ratio (HBR), which improved 340 basis points year over year to 89.6%.
Management raised 2026 premium and service revenue guidance to $173–$177 billion, up from $171–$175 billion, while projecting full-year HBR of 90.5%–91.3%, an improvement from 91.9% in 2025 (though still above 88.3% in 2024). This suggests that recent pricing and cost actions are beginning to support underwriting results.
The balance sheet also strengthened. Long-term debt fell 7.6% from year-end 2025 to $16 billion, cash and equivalents rose 35% to $24.2 billion, and operating cash flow reached $8 billion in first-half 2026, up 142.4% year over year, partly aided by favorable timing.
Estimates for OSCR and CNC
The Zacks Consensus Estimate for OSCR’s 2026 and 2027 revenues implies a 60.8% and 9.6% year-over-year increase, respectively. EPS estimates for 2026 and 2027 imply a 191.1% and 15.8% year-over-year increase, respectively. EPS estimates for 2026 and 2027 witnessed no movement in the past 30 days. The expected long-term earnings growth rate is pegged at 44.2% and the company has a Growth Score of A.
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The Zacks Consensus Estimate for CNC’s 2026 revenues implies a 0.8% increase, whereas the same for 2027 suggests a 1.9% year-over-year decrease. EPS estimates for fiscal 2026 and 2027 indicate a 135.1% and a 9.2% year-over-year increase, respectively. EPS estimates for 2026 witnessed no movement but those for 2027 moved 1 cent south in the past 30 days. The expected long-term earnings growth rate is pegged at 32.4% and the company has a Growth Score of A.
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Price Performance of OSCR and CNC
OSCR shares have gained 2.8% in the past month, while CNC shares have gained 5% in the same time.
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Are OSCR and CNC Shares Expensive?
OSCR is trading at a trailing 12-month price-to-tangible book value multiple of 5.26, higher than its median of 3.9 over the past three years. CNC’s trailing 12-month price-to-tangible book value multiple sits at 4.43, lower than its median of 7.17 over the past three years.
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Conclusion
Oscar’s expanding membership, improving cost structure, scalable technology platform, consistent underwriting discipline and solid balance sheet will help it convert its strong results into durable earnings.
Centene continues to benefit from disciplined pricing, portfolio optimization and favorable Medicaid rate actions. Favorable reimbursement, disciplined portfolio actions, streamlined operations, targeted partnerships and contract wins support Centene’s revenue visibility and long-term margin stability.
OSCR carries a Zacks Rank #2 (Buy) and has a VGM Score of B. CNC sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. Centene’s diversified market presence, price appreciation, and cash generation capability give it an edge over Oscar Health. You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).