OSCR 10-K & 10-Q changes, risk factors and insider trading

Our business involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in or incorporated by reference in this Annual Report on Form 10-K, including our audited Consolidated Financial Statements and related notes, as well as our other filings with the SEC. The occurrence of any of the events described below could harm our business, operating results, financial condition, liquidity, or prospects, and could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and oral statements. In any such event, the market price of our Class A common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, may also impair our business.

Our strategy includes, without limitation, acquiring new members andmembers, retaining existing members, introducing new products and plans, expanding into new markets and lines of business, and monetizing our technology through our +Oscar platform.

We may from time to time expand our membership by entering into new markets, introducing new health plans in the markets in which we currently operate, or entering into new lines of business. As we take these steps, we may incur significant expenses prior to commencement of operations and the receipt of revenue in new markets or from new plans, including significant time and expense in obtaining the regulatory approvals and licenses necessary to grow our operations. For example, in order to obtain a certificate of authority to market and sell insurance in most jurisdictions, we must establish an adequate provider network and demonstrate our ability to perform or delegate utilization management and other administrative functions, and we may be unable to complete these operational steps in a timely manner or at all. In addition, there are requirements and standards that need to be met, including in some cases an annual recertification process, in order to participate on Health Insurance Marketplaces. Even if we are successful in obtaining a certificate of authority, regulators may not approve our proposed benefit designs, provider networks, or premium levels, or may require us to change them or otherwise operate in ways that harm our profitability. If we are unable to obtain the approvals or licenses necessary, or otherwise meet regulatory and Health Insurance MarketplaceMarketplaces’ requirements, our results of operations and financial condition could be materially and adversely affected.

As we expand our member base and enter new markets, we are also required to contribute capital to our insuranceHealth subsidiariesInsurance Subsidiaries to fund capital and surplus requirements, escrows, or contingency guaranties, which may, at times, be significant. If we are successful in establishing a new health plan or entering a new market, increasing membership, revenues and medical costs could trigger further increased capital requirements, including risk-based capital (“RBC”),RBC, that could substantially exceed the net income generated by the health plan or in the new market. In certain states, the applicable statutes mandate higher capital requirements for an initial seasoning period, which may be reduced at the regulator’s discretion. In addition, our membership may increase as a result of other factors over which we have limited control, including as a result of regulatory actions or other developments that contribute to an increase in participants in the Health Insurance Marketplace,Marketplaces, or that contribute to certain of our competitors leaving the Health Insurance Marketplaces, which similarly could trigger further increased capital requirements that could be substantial. We may not be able to fund on a timely basis, or at all, the increased contribution and RBC requirements with our available cash resources, 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. Further, in light of market uncertainty, we have taken, and may in the future take, preemptive steps designed to prudently manage our membership and capital position.

Further, we may experience delays in operational start dates as we enter new markets or decide to exit geographic markets or terminate insurance products, which we have done historically from time to time, which could not only result in financial harm, but also reputational harm to our brand. For example, the Company has previously determined to exit certain geographic markets and terminate certain insurance products, such as when we paused offering products in the California individual market for plan year 2024, our exit from the Medicare Advantage market for plan year 2024, and our exit from the small group market, including non-renewal of our Cigna + Oscar relationship, effective at the end of 2024. In addition, if competitors seek to retain market share by reducing prices, we may be forced to reduce our prices on similar plan offerings in order to remain competitive. There is no assurance that aA reduction in our plan pricing wouldmay not enable us to maintain our competitive position, and any such reduction could impact our financial condition or require a change in our operating strategies. As a result of these factors, entering new markets or introducing new health plans may decrease our profitability.

We also pursue opportunities to monetize our technology platform through +Oscar and we may be in discussions with respect to one or more such opportunities at any given time. To offer our +Oscar platform administrative services, we may be required to obtain and maintain licenses and approvals in new and existing markets, including for third party administrative services, utilization review administrative services, pharmacy benefit administration, or preferred provider network administration services. We may not be able to doobtain soand maintain such licenses and approvals on our expected timetable or at all, or to otherwise expand our administrative service offerings. Even if we are able to obtain necessary licenses and approvals, our +Oscar arrangements may pose further operational challenges, may not be implemented on our expected timetable or at all, may not perform as well as expected, may not achieve timely profitability or expected synergies, may require us to incur additional costs, may expose us to additional liability, or may result in limitations on our ability to offer products in certain insurance markets and geographic regions. In the past, we have faced issues performing on our +Oscar commitments and may in the future face similar issues with respect to our +Oscar or other commitments. If we are not able to successfully implement and/or perform on our +Oscar arrangements, this may limit our ability to retain current +Oscar clients or obtain +Oscar clients in the future.

We may also pursue opportunistic partnerships and acquisitions to allow us to provide better healthcare options for our members as well as to augment existing operations, and we may be in discussions with respect to one or more partnerships or acquisitions at any given time. For example, in May 2025, we purchased 100% of the equity interests in three businesses operating in the individual market: Lucie, Inc., a CMS approved EDE entity, IHC Specialty Benefits, Inc., an insurance agency that sells individual medical and supplemental health products, and Healthinsurance.org, LLC, which operates online lead generation domains providing educational content for consumers navigating health insurance and the ACA marketplace. Partnerships or other acquisition opportunities that we enter into may not perform as well as expected, may not be integrated successfully, may not achieve timely profitability or expected synergies, may expose us to additional liability, or may limit our ability to offer products in certain insurance markets and geographic regions.regions, or may divert management time and attention away from running the Company’s business and operations.

Pursuing our strategy requires significant capital expenditures, the allocation of valuable management and operational resources, and the hiring of additional personnel, and may strain our operationsoperations, and our financial and management controls and reporting systems and procedures. For example, we have experienced, and may in the future experience, challenges with respect to our operations, including with respect to our claims systems, and these difficulties could increase as our membership increases and as we expand into new markets or business lines. We also have experienced and may in the future experience attrition, which may further exacerbate these challenges. If we are unable to effectively execute our strategy and effectively manage our operations, systems and controls, our results of operations and financial condition could be materially and adversely affected.

•the enhanced APTCseAPTCs under the ARPA are not renewed after 2025, or are otherwise eliminated or reduced, or other APTCs or subsidies under the ACA are eliminated or reduced;

•we fail to continue to offer differentiated and competitive products, includingor asthere aare resultregulatory actions that limit the types of newplans orthat revisedcan regulations,be offered, such as the NBPP;

•there is an initiation of a new SEPsSEP, 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 partythird-party partners;

•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.

We operate in a highly competitive environment and some of the healthHealth insurersInsurance Entities 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 overall market morbidity, 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 projectionprojections of our future expenses.expenses and of the future morbidity of the Health Insurance Marketplace. 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.costs, as well as accurately estimate the future morbidity of the Health Insurance Marketplaces and estimate our risk adjustment transfer.

•increases in the costs of healthcare facilities and services, medical devices and pharmaceuticals,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 asother aforeign resultimports, ofor macroeconomic inflationary effects;

•changes to, or reductions ofof, our utilization management functionsfunctions, such as preauthorization of services, concurrent review or requirements for physician referrals;

•provider or broker fraudfraud.

The Consolidated Appropriations Act of 2023 delinked Medicaid redeterminations frombegan the end of the PHE for COVID-19, and Medicaid redeterminations were required to begin byon April 1, 2023.2023 Although redeterminations were expected to conclude by June 2024,and 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, 2024.2024 Datato fromfacilitate CMS on Medicaid redeterminations showed significant increasesenrollment in the ACA planby enrollments among consumers in 2023 and 2024individuals who lost Medicaid orcoverage CHIPunder coverage.the Whileredetermination CMSprocess. announcedOur understanding is that in 2024 thatmost allstates substantially completed the unwinding-related renewals for beneficiaries enrolled in Medicaid or CHIPCHIP. mustWe bebelieve completedthese noMedicaid later than December 31, 2025, our understanding is that the majority of statesredeterminations have nowpreviously substantiallycontributed completedto theirincreases unwinding processes. We anticipate that any future impact onin our membership in connection2024; withhowever, we do not believe that we experienced significant growth in our membership from the Medicaid redetermination process in 2025. We believe that members who have enrolled in the ACA enrollments due tothrough the unwindingMedicaid redetermination process have increased the overall morbidity of the MedicaidHealth continuousInsurance enrollment condition will not be as significant as the membership growth we experienced in plan year 2024.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 estimateestimates willmay not be adequate, and any adjustments to thethese estimateestimates 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 operationsoperations, and the costs of hiring and retaining personnel. External factors, including general economic conditions such as inflationinflation, tariffs, and unemployment levels,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 partythird-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 membersmembers, as a result of market morbidity shifts, or when we commence or exit operations in a new state or region.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 following discussion and analysis of our financial condition and results of operations as of December 31, 20242025 and 20232024 should be read in conjunction with our audited Consolidated Financial Statements and the related notes included elsewhere in this filing. The discussion contains forward-looking statements that involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A.”“Risk Factors” of this Annual Report on Form 10-K. The following discussion and analysis does not include certain items related to the year ended December 31, 2023,2024, including year-to-year comparisons between the year ended December 31, 20232024 and the year ended December 31, 2022.2023. For a comparison of our results of operations for the fiscal years ended December 31, 20232024 and December 31, 2022,2023, see Part II, Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023,2024, filed with the SEC on February 15,20, 2024.2025.

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 ACAPatient Protection and offersAffordable Care Act (“ACA”). We also offer health technology solutions that power the healthcare industry through +Oscar. Our technology drives superior experiences, deep engagement, and high-value clinical care, earning us the trust of approximately 1.68 million effectuated members, as of December 31, 2024.

We regularly review our Total Revenue,revenue, MLR,Medical Loss Ratio (“MLR”), Selling, Generalgeneral, and Administrativeadministrative Expenseexpense Ratioratio (“SG&A Expenseexpense Ratioratio”), Earnings (loss) from operations, and Net Incomeincome (loss) attributable to Oscar HealthHealth, Inc., and Adjusted EBITDA, a non-GAAP financial metric,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 includes Premium revenue,revenue (net of risk adjustment transfers), Investment income, and ServicesOther and other revenue.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.

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. MLR in our existing products are subject to various federal and state minimum requirements.

The SG&A Expenseexpense Ratioratio reflects the Company’s Selling,selling, generalgeneral, and administrative expenses, as a percentage of Total revenue.revenue (net of risk adjustment transfers). We believe the SG&A Expenseexpense Ratioratio is useful to evaluate our ability to manage our overall selling, general, and administrative cost base.

Net income (loss) attributable to Oscar Health, Inc. is Net earnings (loss) allocated to the Company after net income (loss) attributable to noncontrolling interests. It 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.

Our operations are subject to comprehensive and detailed federal, state, and local laws and regulations throughout the jurisdictions inregulations, which we do business. Developments related to the regulatory regimes in which we operate have in the past impacted, and are expected to continue to impact,rapidly ourevolve resultsand of operations.change. During the periods presented in the financial statements contained elsewhere in this Annual Report on Form 10-K, certain regulatory developments have impacted, and mayare expected to continue to impact, our results of operations.

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 and our expansion into or exiting offrom certain markets,markets. andMembership furthermay vary throughout the year due to disenrollments, any SEP, and other market dynamics that are in effecteffect. suchSuch asdynamics Medicaidmay redeterminations,include but are not limited to enhancements, extensions, reductions or eliminations of APTCs,APTCs; other legislative or regulatory actions, such as recent Congressional and CMS initiatives to improve the integrity in the ACA eligibility and enrollment process and pre-enrollment verification procedures; individuals disenrolling before they become effectuated members or the removal of members for non-payment or by CMS in accordance with fraud, waste and abuse laws and regulations; Medicaid redeterminations; or other factors that enablemay cause the overall market to grow or decline throughout the year.decline.

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 healthHealth insurers.Insurance Entities. Under thisthese program,programs, 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 the second and third quarters of 2025, the Company received third party reports indicating that the ACA average market risk scores (a measure of market morbidity) were significantly higher than the overall market expectation, which resulted in the Company significantly increasing its estimated risk adjustment transfer payable for such quarters. In the fourth quarter, the Company received third party reports indicating that overall market morbidity had stabilized, but that the Company had lower-than-anticipated relative risk scores, which resulted in the Company increasing its estimated risk adjustment transfer payable as of December 31, 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 the ACA, relative to that of other insurers. The data 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 atearlier the beginning ofin the policy year or, in the case of SEP driven enrollment, throughout the policy year, resulting from compositionthe offact thethat risk scorescores beingare based on concurrentlagged 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.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 carrierscarriers’ operations, which may impact the ultimate degree of market levelmarket-level risk. Actual risk adjustment calculations and transfers have in the past materially differed, and could materially differ in the future, from our assumptions.

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, provider disputed claims and various other medical-related costs. Our development of the benefits payable estimate is a continuous process we monitor and refine on a monthly basis as additional claims receipts and payment information becomes available. Our medical expenses are impacted by unit costs and utilization, as well as seasonal effects ofon medical costs, such as themembers utilizationpay their contractual claims portion of claims responsibility, meeting their 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,costs. andOur medical expenses are also impacted by 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.

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. Additionally,For more information on how our member enrollment and medical expenses haveare historicallyaffected beenby highestseasonality, towardssee the“Recent secondDevelopments, halfTrends ofand theOther yearKey dueFactors toImpacting aPerformance–Members” numberand of“–Claims factors discussedIncurred” above.

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 11 - Reinsurance” to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for a description of the accounting methods used to record our quota share reinsurance arrangements.

The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilitiesliabilities, and disclosure of contingent assets and liabilities in our financial statements. We regularly assess these estimates; however, actual amounts could differ from those estimates. The most significant items involving management’s estimates include estimates of benefits payable and risk adjustment. The impact of changes in estimates is recorded in the period in which theythe becomeimpact becomes known.

An accounting policy is considered to be critical if the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and the effect of the estimates and assumptions on financial condition, or operating performance. The accounting policies that reflect a significant level of estimation and that are most likely to have a material impact on our reported financial results are described below. Other accounting policies are disclosed in Part II, Item 8, “Financial Statements and Supplementary DataData,” in this Annual Report on Form 10-K.

Our development of the benefits payable estimate is a continuous process which we monitor and refine on a monthly basis as additional claims receipts and payment information becomes available. As more complete claims information becomes available, we adjust the amount of the estimates and include the changes in estimates in medical costs in the period in which the changes are identified. In each reporting period, our operating results include the effects of more completely developed benefits payable estimates associated with previously reported periods. If the revised estimate of prior period healthcare claims is less than the previous estimate, we will decrease reported healthcare claims in the current period (favorable development). If the revised estimate of prior period healthcare claims is more than the previous estimate, we will increase reported healthcare costs in the current period (unfavorable development). Healthcare costs in the years ended December 31, 2025 and 2024 included a favorable healthcare claim development related to prior yearsyears, of $164.7 million (net of reinsurance) of $239.5 million and an$164.7 unfavorablemillion, health claim development of $19.8 million (net of reinsurance) for the year ended December 31, 2023.respectively.

For more detail related to our medical claims expenses, see “Note 2 - Summary of Significant Accounting Policies” to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

The risk adjustment programs in the individual and small group markets we serve are designed to mitigate the potential impact of adverse selection and provide stability for health insurers. Plans with lower than average risk scores will generally pay into the pool, while plans with higher than average risk scores will generally receive distributions. Plans receive higher payments for members with higher risk scores than members with lower risk scores.

Premium revenue includes subsidies received from the federal government, direct policy premiums collected from our members and(net subsidies received from the federal government,of risk adjustment transfers,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.

ServicesOther andrevenues other revenue includes primarilyinclude revenue earned fromthrough administrativebrokerage, enhanced direct enrollment (“EDE”) platform, and market education services, fees for services performed as part ofvia the +Oscar platform, asrevenue wellsharing asfrom virtual credit card rebates, and sublease income.

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 disputed claimsclaims, 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, GeneralGeneral, and Administrative Expenses

Selling, generalgeneral, and administrative expenses primarily include distribution and servicing costs, premium taxes, exchange fees, other taxes and fees, employee-related expenses, wages, benefits, costs of software and hardware, stock-based compensation, the impact of quota share reinsurance, stock-based compensation, and other administrative costs.

Premium revenue increased by $3,285.2$2,498.6 million, or 58%,28%, for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. The increase was primarily driven by higher membership resulting from above market growth during 20242025 Open Enrollment, strongpartially retention,offset andby SEPan memberincrease additions.in the net risk adjustment transfer accrual.

(1) Represents total membership for our co-branded partnership with Cigna. We did not renew the Cigna+Oscar Small Group arrangement after its initial term ended on December 31, 2024.

(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 increased by $30.3$17.2 million, or 19% ,9%, for the year ended December 31, 2024,2025, compared to the same period in 2023,2024, primarily due to a larger asset base.base, partially offset by lower yields.

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.

Our technology drives better choice, deeper engagement, and connection to high-value clinical care,care earningfor usour themembers. trustWe ofserve approximately 3.23.0 million effectuated members (“members”) as of MarchJune 31,30, 2026, which represents an approximately 56%46% increase compared to MarchJune 31,30, 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. Refer to “Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations-Recent Developments, Trends and Other Key Factors Impacting Performance-Members”, and “Note 3 - Revenue Recognition” for further discussion regarding our members.discussion.

The Company also wholly owns three businesses operating in the individual market (collectively, the “Marketplace Subsidiaries”): Lucie, Inc. (formerly known as INSXCloud, Inc.), a technologycloud-based enrollment platform for consumers, employers and brokers; Trove Group Inc. (formerly known as IHC Specialty Benefits, Inc.), an insurance agency that sells individual medical and supplemental health products, and HealthInsurance.org, LLC, a lead generation website providing educational content to help consumers navigate health insurance as well as the ACAACA, Medicare, and MedicareMedicaid marketplaces.

Earnings (Loss) from Operations

Earnings (loss) from operations is the Company's total revenue less total operating expenses. We believe earnings (loss) from operations is an important metric for assessing operating performance.

Net Income (Loss) Attributable to Oscar Health, Inc.

Net income (loss) attributable to Oscar Health, Inc. is net earnings (loss) allocated to the Company after net income (loss) attributable to noncontrolling interests. It 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, TrendsTrends, and Other Key Factors Impacting Performance

•The enhanced Advanced Premium Tax Credits (“eAPTCs”) that were previously in place sincefrom 2021 until the end of 2025 contributed to increases in the population of the health insurance marketplaces established by the ACA and operated by the federal government, as well as other marketplaces operated by individual states (collectively, “Health Insurance Marketplaces”), and, as wella as increases inresult, our membership. These eAPTCs expired at the end of 2025, which we believe caused coverage to become unaffordable for some individuals, reducing both the overall participation in the Health Insurance Marketplaces and the Company’s membership since the end of the 2026 open enrollment period (“OEP”).

•We expectbelieve that the expiration of the eAPTCs, and the implementation of any program integrity requirements (such as the Program Integrity RulesRules, the 2027 NBPP, and the OBBBA) and any related regulatory inquiries could continue to negatively impact the size of the Health Insurance Marketplaces and our membership in future years. Any resulting market contraction could negatively impact market morbidity. For more information, see Part I, Item 1, “Business– Government Regulation–Ongoing Requirements and Changes to the ACA”, and Part I, Item 1A. “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 overall market morbidity, or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows” in our Annual Report on Form 10-K for the year ended December 31, 2025.

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. For example, on April 2, 2026, the Trump administration issued a proclamation under Section 232 of the Trade Expansion Act imposing 100% tariffs on patented pharmaceuticals and associated pharmaceutical ingredients, imported into the United States, which taketook effect on July 31, 2026 for certain enumerated companies, and take effect on September 29, 2026 for all other companies, unless manufacturers agree to specific government drug pricing deals or commit to shifting production and research and development of patented pharmaceuticals and pharmaceutical ingredients domestically. While this action may pressure drug manufacturers to reduce list prices, there could also be a corresponding, or even disproportionate, decrease in the pharmaceutical rebates that we negotiate and typically receive. Since the expectation of these rebates is factored into our premium pricing strategy, a reduction in rebates that outpaces any decline in underlying drug costs could exert financial pressure, potentially leading to an adverse impact on our earnings from operations and an increase in our MLR.

Our membership is measured as of a particular point in time. Membership may vary throughout the year due to disenrollments, SEP, and other market dynamics that are in effect. Member disenrollments typically result from voluntary termination by members, non-payment of premiums beyond the member’s grace period, or removal by CMS for failure to meet program integrity requirements or in accordance with fraud, wastewaste, and abuse laws and regulations. In accordance with federal regulations, members receiving APTC subsidies are entitled to a 90-day grace period for the non-payment of premiums. For all other member enrollees, the grace period is typically 30 days, subject to specific state requirements. Market dynamics may include but are not limited to enhancements, extensions, reductions or eliminations of APTCs; other legislative or regulatory actions, such as recent Congressional and CMS initiatives to improve the integrity in the ACA eligibility and enrollment process and pre-enrollment verification procedures; Medicaid redeterminations; or other factors that may cause the overall market to grow or decline. As of July 1, 2026, there were approximately 250 thousand to 300 thousand members who we expect will be retroactively disenrolled in connection with CMS program integrity requirements or fraud, waste and abuse laws and regulations. For more information on the recognition of premium related to membership, see “Note 3 - Revenue Recognition”.

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 Insurance Entities. Under these programs, 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. Changes in the Company's membership throughout the year, including the impact of member disenrollments, may affect the Company's estimate of its risk adjustment transfer receivable or payable. 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. 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. For the threesix months ended MarchJune 31,30, 2026, risk adjustment transfer payables were approximately 24%20% of direct policy premium revenue, up 13%4% compared to the same period in 2025. The three months ended March 31, 2026, reflected lower claims per member with an assumption of higher offsetting risk adjustment payables, as compared to the three months ended March 31, 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 the ACA, that of other insurers. The data 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 inquiries and 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.

Our medical expenses are impacted by unit costs and utilization, as well as seasonal effects on medical costs, as members pay their contractual claims portion of claims responsibility, meeting their deductibles and out-of-pocket maximums over the course of the policy year, which shiftshifts more costs to us in the second half of the year as we pay a higher proportion of covered claims costs. Our medical expenses are also impacted by 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.

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 10 - Reinsurance” included elsewhere in this Quarterly Report on Form 10-Q for a description of the accounting methods used to record ourthe quota shareCompany’s reinsurance arrangements.

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, 2025. 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 MarchJune 31,30, 2026, 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, 2025.

The Company receives a fixed premium per member per month and recognizes premium revenue during the period in which it is obligated to provide services to its members. For direct policy premiums, revenue is recognizedmembers based on membership and eligibility criteria provided by CMSCMS. andPremium is subject to monthly retroactive adjustment.adjustment based on periodic reconciliation by CMS. Premium revenue isreflects recordedpremium associated with effectuated members, net of adjustment for premium expected to be returnedrefunded to CMS. Premium is expected to be refunded to CMS when a member disenrollment is probable as a result of expected member disenrollments. These adjustments typically result fromthe non-payment of premiumspremium or thewhen removala ofmember membershas bybeen, CMSor it is probable that a member will be, retroactively disenrolled in connection with CMS program integrity requirements and fraud, wastewaste, and abuse laws and regulations.

Other revenues primarily include revenue earned through ourthe Company’s Marketplace Subsidiaries, fees for services performed via the +Oscar platform, revenue sharing from virtual credit card rebates, and sublease income.

Other expenses (income) consists primarily of miscellaneous expenses or income that are not core to our operations, including a profit sharing arrangementsarrangement with oura co-branded health plansplan and changes in the fair value of financial instruments.

Premium revenue increased $1,585.0$2.0 million,billion or 53%,71% for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, and increased $3.6 billion, or 62%, for the six months ended June 30, 2026, compared to the same period in 2025. This increase was driven by higher membership and premium rate increases, partially offset by an increase in the net risk adjustment transfer accrual. As of MarchJune 31,30, 2026, effectuated membership increased by 1.10.9 million, or 56%46% compared to MarchJune 31,30, 2025, primarily driven by above market growth during the 2026 OEP.OEP and strong retention.

Investment income increased $14.5$30.8 million,million or 31%,57% for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, and increased $45.3 million, or 45%, for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to higher invested assets, partially offset by lower yield.

Medical expenses increased $970.2$1.2 million,billion or 43%,49% for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, and increased $2.2 billion, or 46%, for the six months ended June 30, 2026, compared to the same period in 2025. This increase was primarily due to increased membership, partiallyas offsetwell by modestly loweras medical cost trend. MLR decreased for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025.2025, which included the full first half impact of 2025 risk adjustment true-up driven by higher average market morbidity. The decrease was primarily driven by our disciplined pricing strategy and favorable prior period reserve development. MLR decreased for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to our disciplined pricing strategy, claims and risk adjustment seasonality from metal and new member mix, and favorable prior period reserve development.strategy.

Selling, general, and administrative expenses increased $223.5$156.6 million,million or 46%,29% for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, and increased $380.1 million, or 37%, for the six months ended June 30, 2026, compared to the same period in 2025. This increase was driven by higher membership year over year, resulting in higher volume-driven costs such as taxes and fees and broker commissions. The SG&A expense ratio decreased 60450 basis points to 15.2%14.2% for the three months ended MarchJune 31,30, 2026,2026 compared to 15.8%18.7% for the same period in 2025.2025, primarily due to disciplined expense management and greater fixed cost leverage, as well as the impact of lower risk adjustment as a percentage of premium. The decreaseSG&A wasexpense ratio decreased 250 basis points to 14.7% for the six months ended June 30, 2026, compared to 17.2% for the same period in 2025 primarily due to greater fixed cost leverage and disciplined costexpense management, partially offset by the impact of higher risk adjustment as a percentage of premium.management.

We maintain liquidity at two levels of our corporate structure, through our health insurance and Health Maintenance Organization subsidiaries (collectively, “Health Insurance Subsidiaries”) and through our parent company, Oscar Health, Inc. (on a standalone basis “Parent”), together with subsidiaries excludingother than our Health Insurance Subsidiaries. The majority of our assets consist of cash and cash equivalents and investments.

As of MarchJune 31,30, 2026 and December 31, 2025, total cash and cash equivalents and investments held by our Health Insurance Subsidiaries was $7.8$9.7 billion and $5.1 billion, respectively, of which $19.1$19.6 million and $18.3 million, respectively, was on deposit with regulators as required for statutory licensing purposes. These amounts are classified as restricted deposits on the balance sheets. As of MarchJune 31,30, 2026 and December 31, 2025, total cash and cash equivalents and investments held by our entitiesParent and subsidiaries other than theour Health Insurance Subsidiaries were $279.2$462.3 million and $414.2 million, respectively, of which $9.6 million and $14.7 million was restricted as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

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 $1.7$1.9 billion and $1.0 billion as of MarchJune 31,30, 2026 and December 31, 2025, respectively, which was in compliance with and in excess of the minimum capital requirements for each period. The Health Insurance Subsidiaries in aggregate exceeded the minimum statutory risk-based capital (“RBC”) requirement by $356 million as of December 31, 2025 and are estimated to have approximately $809$994 million of excess capital as of MarchJune 31,30, 2026. 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 the Parent would be required to fund to the extent the applicable Health Insurance Subsidiary did not have excess capital to cover the requirement. In such circumstancescircumstances, we may need 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.

As certain of our Health Insurance Subsidiaries have become profitable and to the extent their levels of statutory capital and surplus exceed applicable 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 threesix months ended MarchJune 31,30, 2026, the Parent received approximately $300.0 million in capital distributions from the Health Insurance Subsidiaries. As noted below, these funds were subsequentlyused usedin the first quarter of 2026 to fund a new insurance subsidiary, Oscar Health Maintenance Organization of Florida, Inc.Inc., which began writing insurance in 2026. During the threesix months ended MarchJune 31,30, 2025, the Health Insurance Subsidiaries did not make anymade loan repayments orof capital$10.0 distributionsmillion to the Parent.

During the threesix months ended MarchJune 31,30, 2026, Parent made $425.5 million of capital contributions to the Health Insurance Subsidiaries, including $300 million in funding for a new insurance subsidiary, Oscar Health Maintenance Organization of Florida, Inc. During the threesix months ended MarchJune 31,30, 2025, Parent made no$19.3 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 $1,081.7$1.1 millionbillion and $683.1 million of additional capital as of MarchJune 31,30, 2026 and December 31, 2025, respectively, which the Parent would have been required to fund to the extent the applicable Health Insurance Subsidiary did not have excess capital to cover the requirement.

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, commencingbeginning on June 30, 2022. The 2031 Notes will mature on December 31, 2031, subjectunless tothey are earlier repurchase,repurchased, redemption,redeemed, or conversion,converted, as further discussed in “Note 9 - Debt,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. As of MarchJune 31,30, 2026, $35 million aggregate principal amount of the 2031 Notes remained outstanding.

The 2030 Notes will accruebear interest at a rate of 2.25% per annum, payable in cash, semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2026. The 2030 Notes will mature on September 1, 2030, unless they are earlier repurchased, redeemed, or converted, as further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. As of June 30, 2026, $410 million aggregate principal amount of the 2030 Notes remained outstanding.

On September 15, 2025, in connection with the pricing of the offering of 2030 Notes, the Company entered into privately negotiated capped call transactions (the “Base Capped Call Transactions”) with certain of the 2030 Notes initial purchasers or their affiliates and certain other financial institutions (the “Option Counterparties”). In addition, on September 16, 2025, in connection with the initial purchasers’ exercise of their option to purchase additional 2030 Notes, the Company entered into additional capped call transactions (the “Additional Capped Call Transactions,” and, together with the Base Capped Call Transactions, (the “Capped Call Transactions”) with each of the Option Counterparties. The Capped Call Transactions cover the aggregate number of shares of the Company’s Class A common stock that initially underlie the 2030 Notes (subject to customary anti-dilution adjustments), and are expected to reduce potential dilution to the Company’s Class A common stock upon any conversion of 2030 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2030 Notes, with such reduction and/or offset subject to a cap, based on the cap price of the Capped Call Transactions.

On February 6, 2026, we entered into a $475.0 million secured three-year revolving credit facility (the “2026 Revolving Credit Facility”), pursuant to a Credit Agreement (the “2026 Credit Agreement”) by and among the Company, certain subsidiaries of the Company, as subsidiary guarantors, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto. For more information, see “Note 9 – Debt” to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. As of June 30, 2026, no borrowings were outstanding under the Revolving Credit Facility.

Net investment income on a consolidated basis was $60.6$84.8 million and $46.1$54.0 million for the three months ended MarchJune 31,30, 2026, and 2025, respectively, and $145.4 million and $100.1 million for the six months ended June 30, 2026 and 2025, respectively. Net investment income for our Health Insurance Subsidiaries was $57.2$83.3 million and $44.4$51.7 million for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively, and $140.5 million and $96.1 million for the six months ended June 30, 2026, and June 30, 2025, respectively.

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 threesix months ended MarchJune 31,30, 2026, net cash provided by operating activities was $2.6$4.7 billion as compared with $0.9$1.4 billion for the same period in 2025. The increase was primarily due to higher premiums received, partially offset by higher claim disbursements.

Cash flows from investing activities primarily include the purchase and disposition of financial instruments. For the threesix months ended MarchJune 31,30, 2026, net cash used in investing activities was $590.3$3,424.9 million as compared to net cash used in investing activities of $174.2$342.4 million for the same period in 2025. This increase was primarily driven by higher investment purchases.

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 threesix months ended MarchJune 31,30, 2026, net cash usedprovided inby financing activities was $3.6$9.7 million as compared to net cash provided of $4.9$27.0 million for the same period in 2025. The change was primarily due to new debt issuance costs and lower proceeds from stock option exercises.exercises and debt issuance costs in 2026.