Oscar Health, Inc. (OSCR) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. Oscar Health, Inc. operates as a single reportable segment, providing health insurance to individuals, families, and employees primarily through the Affordable Care Act (ACA) marketplaces. As of June 30, 2026, the Company served approximately 3.0 million effectuated members, representing a 46% increase year-over-year.
Key Financial Metrics
| Metric (in thousands) | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Total Revenue | $4,880,220 | $2,863,945 | $9,527,414 | $5,910,208 |
| Net Income (Attributable to Oscar) | $361,808 | $(228,361) | $1,040,804 | $46,910 |
| Earnings Per Share (Diluted) | $1.10 | $(0.89) | $3.16 | $0.17 |
| Medical Loss Ratio (MLR) | 79.2% | 91.1% | 75.0% | 83.0% |
| SG&A Expense Ratio | 14.2% | 18.7% | 14.7% | 17.2% |
| Cash & Cash Equivalents | $4,075,612 | $2,774,151 | $4,075,612 | $2,774,151 |
| Long-Term Debt | $431,629 | $430,095 | $431,629 | $430,095 |
Note: Debt consists of $35 million in 2031 Convertible Senior Notes and $410 million in 2030 Convertible Senior Notes. No borrowings were outstanding under the $475 million Revolving Credit Facility as of June 30, 2026.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 70% in Q2 2026 compared to Q2 2025, driven by a 46% increase in membership and rate increases. Premium revenue grew 71% year-over-year.
- Profitability Turnaround: The Company reported a net income of $361.8 million for Q2 2026, a significant improvement from a net loss of $228.4 million in the same period in 2025.
- Medical Loss Ratio Improvement: MLR decreased to 79.2% in Q2 2026 from 91.1% in Q2 2025. This improvement was driven by disciplined pricing strategies and favorable prior period reserve development.
- Expense Management: SG&A expenses increased 29% year-over-year due to volume-driven costs (taxes, fees, commissions), but the SG&A expense ratio improved to 14.2% from 18.7% due to fixed cost leverage.
- Liquidity: Cash and cash equivalents increased by approximately $1.3 billion year-over-year, bolstered by strong operating cash flows of $4.7 billion for the six months ended June 30, 2026.
Guidance, Outlook, and Risks
Regulatory Environment: The expiration of enhanced Advanced Premium Tax Credits (eAPTCs) at the end of 2025 is expected to reduce marketplace participation. Additionally, new "Program Integrity Rules" and the "One Big Beautiful Bill Act" (OBBBA) impose stricter eligibility verification, which may lead to retroactive disenrollments. The Company estimates 250,000 to 300,000 members may be retroactively disenrolled as of July 1, 2026.
Tariff Risks: New tariffs on pharmaceuticals and medical devices (effective July 2026) could increase medical costs and reduce rebates, potentially pressuring the MLR and earnings.
Debt Conversion: The conversion condition for the 2031 Convertible Senior Notes was satisfied in Q2 2026, allowing holders to convert in Q3 2026. The 2030 Notes conversion condition was not met.
Outlook: Management expects continued volatility in membership due to regulatory changes and program integrity inquiries. The Company maintains sufficient liquidity to fund operations for at least the next 12 months.
Investor Verification Checklist
- Membership Retention: Verify the actual impact of the expiration of eAPTCs and new program integrity rules on member retention and retroactive disenrollment rates in Q3 2026.
- MLR Sustainability: Assess whether the improved MLR (75.0% YTD) is sustainable given potential increases in medical costs from new pharmaceutical tariffs.
- Debt Conversion Impact: Monitor the potential dilution from the conversion of the 2031 Convertible Senior Notes, which became eligible for conversion in Q3 2026.
- Regulatory Compliance: Review ongoing legal proceedings and regulatory inquiries regarding claims payment practices and fraud, waste, and abuse laws.
- Cash Flow Timing: Confirm the timing of risk adjustment transfers and CMS reconciliations, as these significantly impact operating cash flows and premium revenue recognition.