Oscar(US:OSCR)2024-08-07 20:10Membership and Market Presence - As of June 30, 2024, Oscar Health, Inc. has approximately 1.6 million members[80] - The company will not renew its Cigna+Oscar Small Group arrangement, exiting the small group market effective December 15, 2024[87] - Membership increased by 610,182, or 63%, as of June 30, 2024, compared to June 30, 2023, driven by strong retention and new enrollments[3] Financial Performance - Total revenue for the three months ended June 30, 2024, was $2,219,341, an increase of 46% compared to $1,521,535 for the same period in 2023[1] - Premium revenue increased by $689.2 million, or 47%, for the three months ended June 30, 2024, compared to the same period in 2023[4] - Investment income rose by $8.5 million, or 21%, for the three months ended June 30, 2024, compared to the same period in 2023[5] - Adjusted EBITDA for the three months ended June 30, 2024, was $104,126, compared to $35,572 for the same period in 2023[14] Medical Expenses and Ratios - Medical expenses increased by $526.7 million, or 45%, for the three months ended June 30, 2024, compared to the same period in 2023[8] - The Medical Loss Ratio (MLR) improved to 79.0% for the three months ended June 30, 2024, compared to 79.9% for the same period in 2023[9] - The Selling, General and Administrative Expense Ratio (SG&A Expense Ratio) is used to evaluate the company's ability to manage its overall cost base[84] Cash Flow and Capital Management - Net cash provided by operating activities for the six months ended June 30, 2024, was $1,131.5 million, an increase from $580.2 million for the same period in 2023, primarily due to higher premiums received[132] - Net cash used in investing activities for the six months ended June 30, 2024, was $778.2 million, a significant change from net cash provided of $179.4 million for the same period in 2023, mainly due to increased purchases of securities[132] - Net cash provided by financing activities for the six months ended June 30, 2024, was $46.0 million, compared to $3.1 million for the same period in 2023, driven by proceeds from stock option exercises[133] - The combined statutory capital and surplus of health insurance subsidiaries was $1,108.3 million as of June 30, 2024, exceeding minimum capital requirements[18] Regulatory and Operational Considerations - Regulatory updates indicate ongoing Medicaid redeterminations, which may contribute to growth in the ACA marketplace[97] - The company is experiencing seasonal patterns affecting member enrollment and medical expenses, with higher costs typically in the second half of the year[94] - A cybersecurity incident involving Change Healthcare occurred on February 21, 2024, but no breach of member data has been reported[89] Investment and Risk Management - Risk adjustment transfer estimates are subject to variability and uncertainty, impacting revenue adjustments based on member demographics and claims[92] - Net investment income for health insurance subsidiaries was $47.2 million for the three months ended June 30, 2024, compared to $39.3 million for the same period in 2023[130] - The company has $115.0 million available to draw under its Revolving Credit Facility until December 2025, with no outstanding borrowings as of June 30, 2024[127] - Assuming a hypothetical 1% increase in interest rates at June 30, 2024, the fair value of the company's investments would decrease by approximately $32.9 million[135] - The company expects cash flows from operations to primarily fund its long-term cash requirements under various contractual obligations[124] - The company maintains cash and cash equivalents and investments on deposit or pledged to various state agencies as a condition for licensure, classifying these as long-term due to regulatory requirements[131]