Oscar Health, Inc. (OSCR) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Oscar Health, Inc. operates as a single reportable segment, providing health insurance to individuals and families primarily through the Affordable Care Act (ACA) marketplaces. As of March 31, 2026, the Company reported approximately 3.2 million effectuated members, representing a 56% increase year-over-year.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $4,647.2 million | $3,046.3 million |
| Premium Revenue | $4,580.9 million | $2,995.8 million |
| Net Income (Attributable to Oscar) | $679.0 million | $275.3 million |
| Earnings Per Share (Diluted) | $2.07 | $0.92 |
| Medical Loss Ratio (MLR) | 70.5% | 75.4% |
| SG&A Expense Ratio | 15.2% | 15.8% |
| Cash & Cash Equivalents | $4,805.1 million | $2,236.6 million |
| Long-Term Debt | $430.9 million | $430.1 million |
Liquidity: The Company generated $2.62 billion in net cash from operating activities. Total cash, cash equivalents, and investments held by Health Insurance Subsidiaries were $7.8 billion. The Parent company received $300 million in capital distributions from subsidiaries during the quarter.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 53% year-over-year, driven by a 56% increase in membership and premium rate increases, partially offset by higher net risk adjustment transfer accruals.
- Profitability: Net income attributable to Oscar Health, Inc. more than doubled to $679.0 million. Earnings from operations rose to $704.1 million from $297.1 million.
- Medical Costs: Medical expenses increased 43% to $3.23 billion due to higher membership. However, the MLR improved to 70.5% (down from 75.4%) due to disciplined pricing, favorable prior period reserve development, and mix shifts.
- Investment Income: Increased 31% to $60.6 million, primarily due to a larger asset base, despite lower yields.
Guidance, Outlook, Risks, and Unusual Items
Regulatory Environment: The expiration of enhanced Advanced Premium Tax Credits (eAPTCs) at the end of 2025 is expected to reduce marketplace participation and membership in future periods. New CMS "Program Integrity Rules" and the "One Big Beautiful Bill Act" (OBBBA) impose stricter eligibility verification, which may impact enrollment processes.
Tariff Risks: Proposed 100% tariffs on patented pharmaceuticals (effective July 31, 2026) could reduce negotiated rebates and increase medical costs, potentially adversely affecting the MLR and earnings.
Debt & Capital:
- 2031 Notes: $35 million outstanding. Holders may elect to convert notes in Q2 2026 as the stock price condition was met.
- 2030 Notes: $410 million outstanding, issued in September 2025.
- Credit Facility: Entered a new $475 million revolving credit facility in February 2026; no borrowings outstanding as of March 31, 2026.
Unusual Items: The Company received approximately $48 million in April 2026 from a settlement regarding Cost-Sharing Reduction (CSR) subsidies, which was recorded as a receivable in the prior year.
Investor Verification Checklist
- Membership Sustainability: Verify the impact of eAPTC expiration and new CMS integrity rules on Q2 and Q3 2026 enrollment trends.
- Pharmaceutical Tariffs: Assess the potential reduction in drug rebates and the resulting impact on the Medical Loss Ratio given the July 2026 tariff implementation.
- Debt Conversion: Monitor the conversion activity of the 2031 Convertible Senior Notes, which became convertible in Q2 2026.
- Risk Adjustment Estimates: Review the volatility of risk adjustment transfer payables, which increased to 24% of direct policy premiums in Q1 2026.
- Capital Requirements: Confirm that statutory capital and surplus levels remain sufficient to support the 56% membership growth and potential regulatory changes.