Oscar Health, Inc. (OSCR) came out with quarterly earnings of $0.62 per share, beating the Zacks Consensus Estimate of $0.28 per share. This compares to loss of $0.18 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 121.43%. A quarter ago, it was expected that this company would post a loss of $0.74 per share when it actually produced a loss of $0.66, delivering a surprise of 10.81%.Over the last four quarters, the company has ...

Oscar Health, Inc. ir.hioscar.com News Release Oscar Health Announces Results for First Quarter 2024 May 7, 2024 New York, NY, May 7, 2024 - Oscar Health, Inc. ("Oscar" or the "Company") (NYSE: OSCR), a leading healthcare technology company, today announced its financial results for the first quarter ended March 31, 2024. "Oscar reported strong first quarter results, showing year-over-year improvement across all core metrics and achieving positive net income," said Mark Bertolini, CEO of Oscar Health. "Our ...

Company Overview - Oscar Health, Inc. had 14 health insurance subsidiaries as of December 31, 2023[16]. - The company is actively involved in government-sponsored programs, such as Medicare, which requires compliance with various laws and regulations[23]. - Oscar Health operates through state-run healthcare exchanges, leveraging its technology platform to enhance member experience[470]. - The company has partnered with Cigna to serve the small group employer market, combining Oscar's member experience with Cigna's provider networks[470]. Financial Performance - Total revenue for the year ended December 31, 2023, was $5,862.9 million, an increase from $3,963.6 million in 2022[456]. - Claims incurred, net for 2023 amounted to $4,642.0 million, compared to $3,280.8 million in 2022, reflecting a significant increase[456]. - The net loss attributable to Oscar Health, Inc. for 2023 was $270.7 million, a decrease from a net loss of $606.3 million in 2022[456]. - The comprehensive loss attributable to Oscar Health, Inc. for 2023 was $259.7 million, compared to $612.3 million in 2022[459]. - The total current assets decreased from $4,121.6 million in 2022 to $3,061.1 million in 2023[454]. - The total liabilities decreased from $3,634.2 million in 2022 to $2,795.4 million in 2023[454]. - The additional paid-in capital increased from $3,509.0 million in 2022 to $3,682.3 million in 2023[454]. - Cash flows from operating activities resulted in a net cash used of $272,159,000 in 2023, a significant decrease from the net cash provided of $380,349,000 in 2022[464]. - The company reported a total cash, cash equivalents, and restricted cash of $1,891,971,000 at the end of 2023, up from $1,580,497,000 at the end of 2022[464]. Membership and Enrollment - Oscar Health's membership is affected by enrollment changes, including retroactive disenrollments, which may impact overall member counts[20]. - The 2024 Open Enrollment Period for the ACA individual market began on November 1, 2023, and will last through at least January 15, 2024[20]. Risk Management - Oscar Health's primary market risk exposure is driven by changes to prime rate-based interest rates, with a hypothetical 1% increase potentially decreasing the fair value of investments by approximately $8.2 million[430]. - The company is subject to various risks, including competition, regulatory changes, and the ability to manage medical costs effectively[23]. - Oscar Health's strategy includes utilizing quota share reinsurance to meet capital and surplus requirements and mitigate risks associated with medical claims[23]. - The company utilizes reinsurance agreements to manage exposure to fluctuations in medical loss ratio (MLR) and meet capital requirements[484]. Claims and Benefits - The Company’s incurred but not reported (IBNR) benefits payable was $966.0 million as of December 31, 2023, primarily related to low dollar claims[443]. - The risk adjustment transfer payable was $1,056.9 million as of December 31, 2023, under the Affordable Care Act's risk adjustment program[446]. - Total claims incurred for the year ended December 31, 2023, is $4,622,263,000, compared to $3,279,461,000 in 2022, indicating an increase of approximately 40.9%[551]. - Total claims paid for the year ended December 31, 2023, is $4,392,932,000, up from $2,975,417,000 in 2022, marking an increase of about 47.5%[553]. - Benefits payable at the end of 2023 is $965,986,000, an increase from $937,727,000 in 2022, reflecting a rise of about 3.1%[546]. Stock and Compensation - Stock-based compensation expense increased to $159,683,000 in 2023 from $112,329,000 in 2022, reflecting a rise in employee compensation costs[464]. - Total stock-based compensation expense for 2023 was $166.841 million, an increase of 48.4% from $112.329 million in 2022[557]. - The total fair value of RSUs vested in 2023 was $89.7 million, an increase from $68.4 million in 2022[566]. - Compensation expense for PSUs in 2023 was $64.9 million, significantly higher than $25.3 million in 2022[575]. Legal and Regulatory Matters - The Company is currently involved in legal proceedings, including a securities class action lawsuit related to its IPO, which alleges failure to disclose certain costs and risks[617]. - The Company believes it has meritorious defenses against the claims in the securities class action lawsuit but cannot predict the outcome[617]. Accounting and Compliance - The company emphasizes the importance of maintaining effective internal control over financial reporting as part of its operational strategy[440]. - The company is evaluating the impact of new accounting standards on its consolidated financial statements, effective for fiscal years beginning after December 15, 2023[513]. - The Company recorded a provision for credit losses of $28.6 million for the year ended December 31, 2023[497]. Capital and Surplus - As of December 31, 2023, the Company's insurance subsidiaries had an aggregate statutory capital and surplus of $800.6 million, up from $701.5 million in 2022, exceeding minimum required statutory capital and surplus[613]. - The Company authorized 825,000,000 shares of Class A common stock and 82,500,000 shares of Class B common stock in connection with the IPO[605].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Oscar Health, Inc. (Exact name of registrant as specified in its charter) Delaware 46-1315570 (State or other jurisdiction of incorporation or organization) 75 Varick Street, 5th Floor New York, NY 10013 (Address of principal executive offices) (Zip Code) For the quarterly period ended September 30, 2023 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the tr ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to__________ Commission File Number: 001-40154 Oscar Health, Inc. (Exact name of registrant as specified in its charter) Delaware 46-13155 ...

[FORWARD-LOOKING STATEMENTS](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines the nature of forward-looking statements and the key risks that could cause actual results to differ - Forward-looking statements are identified by terms such as 'may,' 'will,' 'should,' 'expects,' 'plans,' 'anticipates,' 'could,' 'intends,' 'targets,' 'projects,' 'contemplates,' 'believes,' 'estimates,' 'forecasts,' 'predicts,' 'potential' or 'continue' or their negatives[10](index=10&type=chunk) - Key risks include the company's ability to execute strategy, retain and expand its member base, manage medical costs, achieve profitability, comply with regulations (including ACA), manage competition, ensure data privacy, maintain provider relations, and address internal control weaknesses[11](index=11&type=chunk) [BASIS OF PRESENTATION](index=5&type=section&id=BASIS%20OF%20PRESENTATION) This section defines key terminology and clarifies the use of rounding adjustments in the financial figures presented - References to 'we,' 'us,' 'our,' 'our business,' the 'Company,' and 'Oscar' refer to Oscar Health, Inc and its consolidated subsidiaries[15](index=15&type=chunk) - The report notes that certain monetary amounts, percentages, and other figures have been subject to rounding adjustments, which may cause slight variations from direct calculations using consolidated financial statements[17](index=17&type=chunk) [PART I - FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part contains the unaudited financial statements, management's discussion and analysis, and market risk disclosures [Item 1. Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2023 [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) This statement details the company's assets, liabilities, and stockholders' equity as of March 31, 2023 | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total Assets | $4,483,030 | $4,526,601 | | Total Liabilities | $3,551,268 | $3,634,201 | | Total Stockholders' Equity | $931,762 | $892,400 | | Cash and cash equivalents | $2,109,571 | $1,558,595 | | Short-term investments | $1,324,544 | $1,397,287 | | Benefits payable | $954,076 | $937,727 | | Risk adjustment transfer payable | $1,810,155 | $1,517,493 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) This statement summarizes the company's revenues, expenses, and net loss for the first quarter of 2023 | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total revenue | $1,469,685 | $972,765 | | Total operating expenses | $1,495,050 | $1,041,294 | | Loss from operations | $(25,365) | $(68,529) | | Net loss | $(39,628) | $(77,320) | | Net loss per share (basic and diluted) | $(0.18) | $(0.36) | - Total revenue **increased by 51%** year-over-year, from $972.8 million in Q1 2022 to $1,469.7 million in Q1 2023[22](index=22&type=chunk) - Net loss **decreased by 49%** year-over-year, from $(77.3) million in Q1 2022 to $(39.6) million in Q1 2023[22](index=22&type=chunk) [Consolidated Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This statement reports the company's net loss and other comprehensive income changes for the first quarter of 2023 | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Net loss | $(39,628) | $(77,320) | | Net unrealized gains (losses) on securities available for sale | $5,236 | $(8,535) | | Comprehensive loss | $(34,392) | $(85,855) | - Comprehensive loss **significantly improved to $(34.4) million** in Q1 2023 from $(85.9) million in Q1 2022[24](index=24&type=chunk) [Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement details the changes in the company's equity accounts during the first quarter of 2023 | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total Stockholders' Equity | $931,762 | $892,400 | | Additional Paid-In Capital | $3,582,761 | $3,509,007 | | Accumulated Deficit | $(2,645,759) | $(2,605,987) | | Accumulated Other Comprehensive Income (Loss) | $(4,479) | $(9,715) | - Stock-based compensation expense for Q1 2023 was **$73.2 million**, a notable increase from $27.7 million in Q1 2022[27](index=27&type=chunk)[29](index=29&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement presents the cash inflows and outflows from operating, investing, and financing activities | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $414,715 | $562,849 | | Net cash provided by investing activities | $135,509 | $102,811 | | Net cash provided by financing activities | $506 | $298,775 | | Net increase in cash, cash equivalents and restricted cash equivalents | $550,730 | $964,435 | - Net cash provided by operating activities **decreased by $148.1 million** year-over-year, primarily due to a lower increase in benefits payable[191](index=191&type=chunk) - Net cash provided by financing activities **decreased by $298.3 million** year-over-year, mainly due to net proceeds from the issuance of convertible senior notes in February 2022[193](index=193&type=chunk) [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the accounting policies and specific items in the financial statements [Note 1 - Organization](index=14&type=section&id=Note%201%20-%20Organization) This note describes the company's business model and the significant estimates used in its financial statements - Oscar Health, Inc is a health insurance company built around a full stack technology platform, offering health plans (Individual, Small Group, Medicare Advantage) and leveraging its platform via +Oscar for other payors and providers[36](index=36&type=chunk) - Significant estimates in financial statements include healthcare costs incurred but not yet reported ('IBNR') and risk adjustment[40](index=40&type=chunk) [Note 2 - Revenue Recognition](index=15&type=section&id=Note%202%20-%20Revenue%20Recognition) This note details the components of the company's revenue and its recognition policies | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Direct policy premiums | $1,663,474 | $1,656,421 | | Assumed premiums | $55,935 | $24,790 | | Risk adjustment | $(293,147) | $(366,147) | | Premiums before ceded reinsurance | $1,426,262 | $1,315,064 | | Reinsurance premiums ceded | $2,364 | $(359,663) | | Total premiums earned | $1,428,626 | $955,401 | - Administrative services revenue is earned from the +Oscar offering, leveraging the technology platform for other payors and providers[45](index=45&type=chunk) - The company terminated its administrative services agreement with Health First Shared Services, Inc effective December 31, 2022, impacting administrative services revenue[47](index=47&type=chunk) [Note 3 - Reinsurance](index=16&type=section&id=Note%203%20-%20Reinsurance) This note explains the company's use of reinsurance to manage risk and capital requirements - The company utilizes quota share reinsurance (**48% of premiums ceded in Q1 2023**) and excess of loss (XOL) reinsurance to manage risk and capital requirements[48](index=48&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Reinsurance premiums ceded, gross | $10,078 | $(367,111) | | Experience refunds | $(7,714) | $7,448 | | Reinsurance premiums ceded | $2,364 | $(359,663) | | Reinsurance premiums assumed | $55,935 | $24,790 | | Total claims incurred, net | $1,091,592 | $734,566 | [Note 4 - Business Arrangements](index=18&type=section&id=Note%204%20-%20Business%20Arrangements) This note describes the company's consolidation of variable interest entities that provide telemedical services - The company consolidates the financial results of variable interest entities (VIEs), primarily medical professional corporations that deliver telemedical healthcare services[58](index=58&type=chunk) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | VIE Assets | $135,100 | $129,629 | | VIE Liabilities | $75,897 | $78,126 | [Note 5 - Restricted Cash and Restricted Deposits](index=18&type=section&id=Note%205%20-%20Restricted%20Cash%20and%20Restricted%20Deposits) This note details the cash and investments held to meet state regulatory requirements for insurance licensure - The company maintains cash, cash equivalents, and investments on deposit or pledged to various state agencies for insurance licensure, classified as restricted deposits[60](index=60&type=chunk) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Restricted cash and cash equivalents | $21,656 | $21,902 | | Restricted investments | $5,631 | $5,581 | | Total Restricted Deposits | $27,287 | $27,483 | [Note 6 - Investments](index=19&type=section&id=Note%206%20-%20Investments) This note provides a breakdown of the company's investment portfolio and related income | Investment Type | March 31, 2023 Fair Value (in thousands) | December 31, 2022 Fair Value (in thousands) | | :--- | :--- | :--- | | U.S. treasury and agency securities | $1,049,898 | $1,155,282 | | Corporate notes | $337,613 | $374,449 | | Certificate of deposit | $53,194 | $38,082 | | Commercial paper | $32,101 | $32,730 | | Municipalities | $16,977 | $19,663 | | Total Investments | $1,489,783 | $1,620,206 | | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Interest income | $28,775 | $697 | | Investment discount amortization net of premium accretion | $7,324 | $(1,919) | | Net realized gain (loss) | $(43) | $(581) | | Total Net Investment Income | $36,056 | $(1,803) | - The company determined that an allowance for credit losses on available-for-sale debt securities is not necessary, as declines in fair value are attributed to market fluctuations rather than credit-related events[68](index=68&type=chunk) [Note 7 - Fair Value Measurements](index=21&type=section&id=Note%207%20-%20Fair%20Value%20Measurements) This note explains the methodology used to measure the fair value of financial assets and liabilities - Fair value measurements are categorized into a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable but significant inputs)[73](index=73&type=chunk)[75](index=75&type=chunk) | Asset Type | March 31, 2023 Total Fair Value (in thousands) | December 31, 2022 Total Fair Value (in thousands) | | :--- | :--- | :--- | | Cash equivalents | $207,885 | $118,454 | | U.S. treasury and agency securities | $1,049,898 | $1,155,282 | | Corporate notes | $337,613 | $374,449 | | Certificates of deposit | $53,194 | $38,082 | | Commercial paper | $32,101 | $32,730 | | Municipalities | $16,977 | $19,663 | | Restricted investments (U.S. treasury securities) | $5,631 | $5,581 | | Total Assets at Fair Value | $1,703,299 | $1,744,241 | [Note 8 - Benefits Payable](index=22&type=section&id=Note%208%20-%20Benefits%20Payable) This note details the liability for unpaid medical claims and the actuarial methods used for its estimation - Reserves for medical claims expenses are estimated using actuarial assumptions and recorded as a benefits payable liability[77](index=77&type=chunk) - Favorable development recognized in Q1 2023 primarily resulted from medical claims experience developing more favorably than originally expected[79](index=79&type=chunk) | Metric | March 31, 2023 (in thousands) | March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Benefits payable, beginning of period, net | $672,495 | $363,503 | | Total claims incurred and CAE, net | $1,117,407 | $776,584 | | Total claims and CAE paid, net | $988,982 | $604,893 | | Benefits and CAE payable, end of period, net | $800,920 | $535,194 | [Note 9 - Long-Term Debt](index=23&type=section&id=Note%209%20-%20Long-Term%20Debt) This note provides information on the company's convertible senior notes and revolving credit facility - The company issued **$305.0 million in 7.25% convertible senior notes** due 2031 in February 2022, convertible into Class A common stock at an initial conversion price of approximately $8.32 per share[80](index=80&type=chunk)[82](index=82&type=chunk) - As of March 31, 2023, the net carrying amount of the 2031 Notes was **$298.2 million**, with an estimated fair value of $307.5 million[86](index=86&type=chunk) - The company has a **$200 million senior secured revolving credit facility**, maturing in February 2024, with no outstanding borrowings as of March 31, 2023[88](index=88&type=chunk)[92](index=92&type=chunk) [Note 10 - Earnings (Loss) per Share](index=25&type=section&id=Note%2010%20-%20Earnings%20(Loss)%20per%20Share) This note presents the calculation of the company's basic and diluted net loss per share | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net loss attributable to Oscar Health, Inc (in thousands) | $(39,772) | $(75,152) | | Weighted average common shares outstanding, basic and diluted | 216,912,866 | 210,547,696 | | Net loss per share, basic and diluted | $(0.18) | $(0.36) | - Potentially dilutive securities, including stock options, restricted stock units, performance-based restricted stock units, and shares underlying convertible notes, were excluded from diluted EPS computation due to their anti-dilutive effect in periods of net loss[94](index=94&type=chunk) [Note 11 - Related Party Transactions](index=25&type=section&id=Note%2011%20-%20Related%20Party%20Transactions) This note discloses transactions with related parties, including an investment by a co-founder's affiliated fund - The company issued 2031 Notes to funds affiliated with Thrive Capital, whose Managing Director, Joshua Kushner, is a co-founder, Vice Chairman, and Board member of Oscar[95](index=95&type=chunk) [Note 12 - Commitments and Contingencies](index=26&type=section&id=Note%2012%20-%20Commitments%20and%20Contingencies) This note discusses ongoing legal proceedings, regulatory reviews, and other potential liabilities - The company is subject to ongoing regulatory reviews and investigations by state insurance and healthcare authorities, focusing on areas like claims payment, capital requirements, and privacy[96](index=96&type=chunk) - A securities class action lawsuit (Carpenter v Oscar Health, Inc, et al) was filed in May 2022, alleging failure to disclose inadequate controls related to risk adjustment data validation[98](index=98&type=chunk) - Estimates of costs from legal and regulatory matters are inherently difficult to predict, and ultimate settlements could be material[99](index=99&type=chunk) [Note 13 - Cancellation of Founders Awards](index=27&type=section&id=Note%2013%20-%20Cancellation%20of%20Founders%20Awards) This note explains the cancellation of co-founders' equity awards and the resulting financial impact - Co-Founders Mario Schlosser and Joshua Kushner canceled their Founders Awards (PSUs) on March 28, 2023, to reduce the dilutive effects of equity awards granted to the new CEO and annual employee equity awards[101](index=101&type=chunk) - This cancellation resulted in approximately **$46.3 million of accelerated stock-based compensation expense** recognized during the quarter ended March 31, 2023[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for Q1 2023 [Overview](index=27&type=section&id=Overview) This overview describes Oscar's business as a technology-driven health insurance company and its platform monetization strategy - Oscar is a health insurance company built around a full stack technology platform, offering innovative health plans in the Individual, Small Group, and Medicare Advantage markets[104](index=104&type=chunk) - The company seeks additional opportunities to monetize its +Oscar platform, which powers health plans and products for other payors and providers[104](index=104&type=chunk) [Recent Developments, Trends and Other Factors Impacting Performance](index=27&type=section&id=Recent%20Developments,%20Trends%20and%20Other%20Factors%20Impacting%20Performance) This section discusses key recent events, including leadership changes, reinsurance strategies, and regulatory updates - Mark T Bertolini was appointed Chief Executive Officer effective April 3, 2023, with co-founder Mario Schlosser transitioning to President of Technology[105](index=105&type=chunk) - Quota share reinsurance covered approximately **48% of premiums** in Q1 2023, aiding in risk management and capital efficiency[109](index=109&type=chunk) - Membership **decreased 5%** year-over-year to 1,017,332 as of March 31, 2023, due to proactive management of membership levels during the 2023 Open Enrollment Period, partially offset by growth in Cigna+Oscar members[128](index=128&type=chunk) - The end of the COVID-19 Public Health Emergency (PHE) on May 11, 2023, and the start of Medicaid redeterminations on April 1, 2023, are expected to impact membership and underwriting margin[119](index=119&type=chunk)[120](index=120&type=chunk) - Regulatory updates, including the extension of APTCs through 2025 and limits on non-standard plan options, are anticipated to drive significant growth in the ACA marketplace but also introduce uncertainty[120](index=120&type=chunk)[121](index=121&type=chunk) [Financial Results Summary and Key Operating and Non-GAAP Financial Metrics](index=35&type=section&id=Financial%20Results%20Summary%20and%20Key%20Operating%20and%20Non-GAAP%20Financial%20Metrics) This section presents a summary of financial results and key performance indicators for the first quarter of 2023 | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Premiums before ceded reinsurance | $1,426,262 | $1,315,064 | | Premiums earned | $1,428,626 | $955,401 | | Total revenue | $1,469,685 | $972,765 | | Net loss | $(39,628) | $(77,320) | | Metric | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Total Membership | 1,017,332 | 1,073,595 | | Direct and Assumed Policy Premiums (in thousands) | $1,719,409 | $1,681,211 | | Medical Loss Ratio | 76.3% | 77.4% | | InsuranceCo Administrative Expense Ratio | 18.6% | 19.8% | | InsuranceCo Combined Ratio | 94.9% | 97.2% | | Adjusted Administrative Expense Ratio | 21.7% | 23.8% | | Adjusted EBITDA (in thousands) | $51,068 | $(37,040) | - Medical Loss Ratio (MLR) **improved to 76.3%** in Q1 2023 from 77.4% in Q1 2022, driven by disciplined pricing strategy and total cost of care initiatives[135](index=135&type=chunk) - Adjusted EBITDA **significantly improved to $51.1 million** in Q1 2023 from $(37.0) million in Q1 2022, which includes a non-recurring charge of $46.3 million related to accelerated stock-based compensation expense[129](index=129&type=chunk)[149](index=149&type=chunk) [Components of our Results of Operations](index=35&type=section&id=Components%20of%20our%20Results%20of%20Operations) This section breaks down the key revenue and expense items that constitute the company's financial results - Premiums before ceded reinsurance are primarily derived from members and CMS (APTC program), net of risk adjustment payable, and are influenced by risk sharing adjustments, member acquisition/retention, and policy rates[150](index=150&type=chunk) - Claims incurred, net, encompass paid and unpaid medical expenses, pharmacy benefits, capitation payments, and risk sharing arrangements, with estimates based on actuarial methodologies[154](index=154&type=chunk) - Other insurance costs include distribution costs, broker commissions, wages, marketing, rent, software/hardware, unallocated claims adjustment expenses, and administrative costs supporting the health insurance business[155](index=155&type=chunk) [Results of Operations (Three Months Ended March 31, 2023 compared to Three Months Ended March 31, 2022)](index=42&type=section&id=Results%20of%20Operations) This section provides a detailed comparison and analysis of the company's operating results for Q1 2023 versus Q1 2022 | Metric | 2023 (in thousands) | 2022 (in thousands) | $ Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Premiums before ceded reinsurance | $1,426,262 | $1,315,064 | $111,198 | 8% | | Reinsurance premiums ceded | $2,364 | $(359,663) | $362,027 | (101)% | | Premiums earned | $1,428,626 | $955,401 | $473,225 | 50% | | Administrative services revenue | $3,885 | $18,493 | $(14,608) | (79)% | | Investment income (loss) and other revenue | $37,174 | $(1,129) | $38,303 | NM | | Total revenue | $1,469,685 | $972,765 | $496,920 | 51% | | Claims incurred, net | $1,091,592 | $734,566 | $357,026 | 49% | | Other insurance costs | $227,431 | $165,402 | $62,029 | 38% | | General and administrative expenses | $102,150 | $74,664 | $27,486 | 37% | | Federal and state assessments | $73,891 | $69,867 | $4,024 | 6% | | Net loss | $(39,628) | $(77,320) | $37,692 | (49)% | - Premiums before ceded reinsurance **increased 8%** due to a lower risk transfer per member and higher per member premiums from rate actions on the Individual book and new C+O members[163](index=163&type=chunk) - Administrative services revenue **decreased 79%** primarily due to the termination of the arrangement with Health First Shared Services, Inc[165](index=165&type=chunk) - Investment income and other revenue **increased significantly to $37.2 million** from $(1.1) million, driven by higher investment yields and interest rates[166](index=166&type=chunk) - Claims incurred, net, **increased 49%** primarily due to revisions to the 2023 quota share reinsurance program, which shifted from reinsurance accounting to deposit accounting[167](index=167&type=chunk) - Other insurance costs and General and administrative expenses **increased by 38% and 37%** respectively, largely attributable to the acceleration of non-cash stock compensation expense from the cancellation of Founders Awards[168](index=168&type=chunk)[169](index=169&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's sources of liquidity, capital structure, and cash flow activities - The company manages liquidity at two levels: health insurance subsidiaries and Holdco, with combined statutory capital and surplus of health insurance subsidiaries at **$765.1 million** as of March 31, 2023, exceeding minimum requirements[173](index=173&type=chunk)[175](index=175&type=chunk) - Quota share reinsurance arrangements are estimated to reduce required capital by approximately **$461.1 million** as of March 31, 2023[175](index=175&type=chunk) - Holdco's total cash and cash equivalents and investments were **$260.4 million** as of March 31, 2023, which is believed to be sufficient to fund operating requirements for at least the next twelve months[176](index=176&type=chunk) - Net cash provided by operating activities **decreased by $148.1 million** year-over-year to $414.7 million, primarily due to a lower increase in benefits payable[191](index=191&type=chunk) - Net cash provided by financing activities **decreased by $298.3 million** year-over-year to $0.5 million, mainly due to net proceeds received from the issuance of convertible senior notes in February 2022[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section addresses the company's exposure to market risk, primarily from potential changes in interest rates - The company's primary market risk exposure is to changes in prime rate-based interest rates, which impact investment income and interest expense[194](index=194&type=chunk)[195](index=195&type=chunk) - A hypothetical immediate **1% increase in interest rates** at March 31, 2023, would result in an approximate **$7.6 million decrease** in the fair value of the company's investments[195](index=195&type=chunk) - The company does not hold financial instruments for trading purposes[194](index=194&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) This section discusses the evaluation of the company's disclosure controls and procedures and internal control weaknesses - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were **not effective** as of March 31, 2023, due to a material weakness in internal control over financial reporting[197](index=197&type=chunk) - The material weakness relates to the design and maintenance of effective controls over certain information technology (IT) general controls for financial systems, specifically program change management, user access, and program development testing and approval[201](index=201&type=chunk) - Despite the material weakness, management believes the consolidated financial statements in the report fairly present the financial position, results of operations, and cash flows[198](index=198&type=chunk) - Remediation plans include implementing enhanced policies and procedures, automating components of change management and logical access, and strengthening testing and approval controls for program development[203](index=203&type=chunk)[204](index=204&type=chunk) [PART II - OTHER INFORMATION](index=44&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, and other required disclosures [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 12 for details on legal proceedings and their potential adverse effects - Information regarding legal proceedings is incorporated by reference from Note 12 - Commitments and Contingencies to the Consolidated Financial Statements[208](index=208&type=chunk) - The outcome of legal proceedings is uncertain and could have a material adverse effect on the company's business, results of operations, financial condition, or cash flows[209](index=209&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section presents a comprehensive list of risks that could materially affect the company's business and financial results [Most Material Risks to Us](index=44&type=section&id=Most%20Material%20Risks%20to%20Us) This subsection highlights the most significant risks facing the company, including strategy execution and profitability - Failure to effectively execute strategy and manage growth, including member acquisition/retention, new product introduction, and +Oscar monetization, could harm the business[212](index=212&type=chunk) - The company proactively managed membership growth in Florida during the 2023 Open Enrollment Period to prudently manage capital, temporarily stopping new member acceptance after reaching a threshold[214](index=214&type=chunk)[215](index=215&type=chunk) - Inability to accurately estimate incurred medical expenses or effectively manage medical and administrative costs could negatively impact financial position, results of operations, and cash flows[224](index=224&type=chunk) - The company has a **history of losses** and may not achieve or maintain profitability in the future, despite efforts to price for margin expansion and manage costs[232](index=232&type=chunk)[233](index=233&type=chunk) - Any repeal, changes, or judicial challenges to the ACA and its regulations could materially and adversely affect the business, as approximately **99% of revenue** is derived from ACA-regulated health plans[236](index=236&type=chunk) [Risks Related to the Regulatory Framework that Governs Us](index=53&type=section&id=Risks%20Related%20to%20the%20Regulatory%20Framework%20that%20Governs%20Us) This subsection details risks associated with the complex and evolving regulatory landscape of the healthcare industry - The company operates in a highly regulated industry, requiring compliance with numerous state and federal laws and regulations, including maintaining regulatory approvals and meeting performance standards[240](index=240&type=chunk)[241](index=241&type=chunk) - Failure to comply with applicable privacy, security, and data laws (e.g, HIPAA, CCPA, CPRA) or consumer protection laws could lead to increased costs, significant liability, and reputational harm[253](index=253&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) - The company is subject to extensive fraud, waste, and abuse laws (e.g, federal Anti-Kickback Statute, Stark Law, False Claims Act), with potential violations leading to treble damages, fines, penalties, and exclusion from government programs[263](index=263&type=chunk) - Government audits, such as CMS Risk Adjustment Data Validation (RADV) audits, could result in significant payment adjustments, fines, or sanctions[267](index=267&type=chunk) [Risks Related to our Business](index=58&type=section&id=Risks%20Related%20to%20our%20Business) This subsection outlines operational risks, including provider relations, geographic concentration, and cybersecurity threats - Profitability depends on contracting with hospitals, physicians, and other healthcare providers at competitive prices and maintaining good relations; loss of key providers or inability to renew contracts could adversely affect the business[271](index=271&type=chunk) - Geographic concentration in states like **Florida, Texas, Georgia, and California** exposes the company to heightened risks from regional regulatory changes, increased competition, and natural disasters[289](index=289&type=chunk) - Reliance on third-party vendors and service providers (e.g, AWS, GCP, PBMs) for administrative functions and product administration creates vulnerability to service disruptions, data security incidents, and non-compliance[291](index=291&type=chunk)[293](index=293&type=chunk) - Cyber-attacks or privacy/data security breaches could disrupt information systems, lead to significant liability, adverse regulatory consequences, reputational harm, and loss of business[304](index=304&type=chunk)[306](index=306&type=chunk) - The company's success depends on the continued service of its CEO, Co-Founders, senior management, and highly-specialized technology and insurance experts; loss of these key personnel could significantly delay strategic objectives[299](index=299&type=chunk)[301](index=301&type=chunk) - The company has a **limited operating history**, making it difficult to evaluate current business performance, implement its business model, and predict future prospects, especially for new market entrants and +Oscar arrangements[283](index=283&type=chunk) [Risks Related to our Indebtedness](index=73&type=section&id=Risks%20Related%20to%20our%20Indebtedness) This subsection describes risks associated with the company's debt obligations, including covenants and refinancing - Restrictions imposed by the Revolving Credit Facility and other debt covenants may limit the company's ability to incur additional debt, make investments, or pay dividends[347](index=347&type=chunk)[351](index=351&type=chunk) - Failure to comply with financial covenants (direct policy premiums, liquidity, combined ratio) under the Revolving Credit Facility could result in a default and acceleration of borrowings[350](index=350&type=chunk) - The transition from LIBOR to alternative benchmarks may increase interest expense and incur significant legal risks[354](index=354&type=chunk)[355](index=355&type=chunk) - The company may be unable to raise the necessary funds to repurchase its outstanding 2031 Notes for cash following a fundamental change or on optional repurchase dates, or to pay any cash amounts due upon conversion[356](index=356&type=chunk)[357](index=357&type=chunk) [Risks Related to Ownership of Our Class A Common Stock](index=76&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock) This subsection details risks for stockholders, including the dual-class structure and dividend policy - The dual-class structure of common stock concentrates voting control with Thrive Capital and the Co-Founders (**82.5% of voting power** as of March 31, 2023), limiting the influence of other investors[360](index=360&type=chunk) - The dual-class structure may result in a lower or more volatile market price for Class A common stock and could make the company ineligible for inclusion in certain stock indices[364](index=364&type=chunk) - The company is a **'controlled company'** under NYSE rules and relies on exemptions from certain corporate governance requirements, such as the composition of its nominating and corporate governance committee[365](index=365&type=chunk)[366](index=366&type=chunk) - The company **does not intend to pay dividends** on its Class A common stock for the foreseeable future, as it plans to retain all available funds and future earnings to fund business development and growth[367](index=367&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities to report for the period - No unregistered sales of equity securities or use of proceeds were reported[389](index=389&type=chunk) [Item 3. Defaults Upon Senior Securities](index=75&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported[390](index=390&type=chunk) [Item 4. Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that the item regarding mine safety disclosures is not applicable - Mine safety disclosures are not applicable to the company[391](index=391&type=chunk) [Item 5. Other Information](index=75&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report under this item - No other information was reported under this item[392](index=392&type=chunk) [Item 6. Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational and employment documents - Exhibits include Amended and Restated Certificate of Incorporation and Bylaws, employment agreements for Mark T Bertolini and Mario Schlosser, and Founders Award Cancellation Agreements[394](index=394&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer (pursuant to Rule 13a-14(a)/15d-14(a) and 18 U.S.C Section 1350) are also included[394](index=394&type=chunk) [SIGNATURES](index=77&type=section&id=SIGNATURES) This section provides the official signatures of the company's certifying officers - The report was signed on May 9, 2023, by Mark T Bertolini (Chief Executive Officer), Siddhartha Sankaran (Chief Financial Officer), and Victoria Baltrus (Chief Accounting Officer)[399](index=399&type=chunk)

Company Structure and Operations - Oscar Health, Inc. had a total of 14 health insurance subsidiaries as of December 31, 2022[20]. - The company operates through health insurance subsidiaries and offers services via its +Oscar platform, focusing on value-based care[484]. Financial Performance - Total revenue for the year ended December 31, 2022, was $3,963,638, a significant increase of 116.5% compared to $1,838,715 in 2021[468]. - Premiums earned rose to $3,871,117 in 2022, up 111.3% from $1,831,020 in 2021[468]. - Total operating expenses increased to $4,553,505 in 2022, up 91.1% from $2,383,196 in 2021[468]. - Claims incurred, net, were $3,280,798 in 2022, representing a 102.5% increase from $1,623,995 in 2021[468]. - Administrative services revenue surged to $61,047 in 2022, compared to $5,394 in 2021, marking a 1,030.5% increase[468]. - Investment income and other revenue increased to $31,474 in 2022, up from $2,301 in 2021, a growth of 1,267.5%[468]. - The net loss attributable to Oscar Health, Inc. for 2022 was $606,275, compared to a net loss of $572,606 in 2021, reflecting a 5.8% increase in losses[471]. - Comprehensive loss attributable to Oscar Health, Inc. was $612,319 in 2022, compared to $577,156 in 2021, indicating a 6.1% increase in comprehensive losses[471]. - Net loss for the year ended December 31, 2022, was $609,552, compared to a net loss of $571,426 in 2021, representing an increase of 6.5%[477]. Assets and Liabilities - Total current assets increased to $4,121.6 million as of December 31, 2022, from $2,305.9 million in 2021, marking a 78.9% growth[466]. - Total liabilities rose to $3,634.2 million as of December 31, 2022, up from $1,929.1 million in the previous year, representing an increase of 88.5%[466]. - The company's cash and cash equivalents increased to $1,558.6 million as of December 31, 2022, compared to $1,104.0 million in 2021, a rise of 41.1%[466]. - The accumulated deficit grew to $2,606.0 million as of December 31, 2022, from $2,000.0 million in the previous year, indicating a 30.3% increase[466]. - The total stockholders' equity decreased to $892.4 million as of December 31, 2022, down from $1,392.5 million in 2021, a decline of 36.0%[466]. - The company's long-term debt stood at $298.0 million as of December 31, 2022, indicating the company has taken on debt compared to the previous year when there was none[466]. Membership and Market Risks - The company reported that its membership is affected by enrollment changes, including retroactive disenrollments[20]. - Oscar Health's primary market risk exposure is changes to prime rate-based interest rates, which are sensitive to various economic factors[439]. - The company is subject to heightened competition in the health insurance markets, impacting its ability to retain and expand its member base[23]. - Oscar Health's ability to achieve or maintain profitability in the future is uncertain due to various risks, including regulatory changes[23]. Regulatory and Compliance - The Company established a minimum Medical Loss Ratio (MLR) requirement, mandating insurers to pay rebates when MLR falls below set thresholds, impacting premium revenue adjustments[497]. - The Health Insurance Industry Fee (HIF) was permanently repealed starting in 2021, following a temporary suspension in 2019 and resumption in 2020[497]. - The Company utilizes quota share and excess of loss (XOL) reinsurance contracts to manage exposure to unexpected MLR fluctuations and reduce capital requirements[498][500]. - The company has not maintained effective internal control over financial reporting as of December 31, 2022, due to a material weakness identified[445]. Cash Flow and Investment - Cash flows from operating activities resulted in a net cash provided of $380,349 for 2022, a significant recovery from a net cash used of $(181,745) in 2021[477]. - Cash used in investing activities decreased to $(226,519) in 2022 from $(774,515) in 2021, indicating improved cash management[477]. - The fair value of total investments as of December 31, 2022, was $1,620,206, a slight increase from $1,431,562 in 2021[545]. - The net investment income for the year ended December 31, 2022, was $27,594,000, a significant increase from $2,395,000 in 2021[551]. Stock and Equity - The company executed a one-for-three reverse stock split, resulting in 132,760,639 shares of Class A common stock and 35,335,579 shares of Class B common stock[19]. - The weighted average common shares outstanding increased to 212,474,615 in 2022 from 178,967,056 in 2021, reflecting a 18.7% increase[468]. - The total fair value of RSUs vested in 2022 was $68.4 million, significantly higher than $13.2 million in 2021[583]. - The amount of unrecognized compensation expense for RSUs as of December 31, 2022, was $134.3 million, expected to be recognized over 2.3 years[584]. - Performance-based restricted stock units (PSUs) granted in 2022 totaled 1,659,598, with an outstanding total of 8,464,577 PSUs at year-end[586]. Debt and Financing - The company issued $305 million in convertible senior notes in February 2022, with a 7.25% annual interest rate, maturing on December 31, 2031[607]. - As of December 31, 2022, the net carrying amount of the 2031 Notes was $298 million, with an estimated fair value of $190.8 million[614]. - The company has a revolving credit facility of $200 million, maturing on February 21, 2024, with the option to increase commitments by up to $50 million[616]. - The financial covenants for the Revolving Credit Facility include a maximum combined ratio of 108% for fiscal year 2022 and 102% for fiscal year 2023[618].

Oscar Health, Inc. Fourth Quarter and Full Year 2022 Earnings Presentation HIOSCAR.COM This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained herein are forward-looking statements. These statements include, but are not limited to, statements about our financial outlook and estimates, including direct and assumed policy premiums, medical loss ratio, InsuranceCo administ ...

Oscar Health, Inc. (NYSE:OSCR) Q4 2022 Earnings Conference Call February 9, 2023 5:00 PM ET Company Participants Cornelia Miller – Vice President of Corporate Development and Investor Relations Mario Schlosser – Co-Founder and Chief Executive Officer Sid Sankaran – Chief Financial Officer Conference Call Participants Michael Ha – Morgan Stanley Jonathan Yong – Credit Suisse Gary Taylor – Cowen Kevin Fischbeck – Bank of America Josh Raskin – Nephron Research Nathan Rich – Goldman Sachs Stephen Baxter – Wells ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to__________ For the quarterly period ended September 30, 2022 Commission File Number: 001-40154 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ____________________________________________________________ Oscar Health, Inc. (Exact ...