Oscar(US:OSCR)2024-11-07 21:11Membership and Growth - As of September 30, 2024, Oscar Health, Inc. has approximately 1.65 million members, reflecting the company's member-first philosophy and innovative approach to care[93] - Membership increased by 671,124, or 68%, as of September 30, 2024, compared to September 30, 2023, driven by strong retention and new enrollments[117] - The company expects transitions from Medicaid and CHIP coverage to ACA marketplace plans to contribute to growth in the ACA marketplace[110] Financial Performance - Total revenue for the three months ended September 30, 2024, was $2,423.5 million, up from $1,440.0 million in the same period of 2023, representing a 68.3% increase[1] - Premium revenue increased by $976.2 million, or 70%, for the three months ended September 30, 2024, compared to the same period in 2023[118] - Medical expenses increased by $840.8 million, or 72%, for the three months ended September 30, 2024, compared to the same period in 2023[121] - Adjusted EBITDA for the nine months ended September 30, 2024, was $311.9 million, compared to $66.4 million for the same period in 2023[127] - Selling, general, and administrative expenses increased by $134.5 million, or 41%, for the three months ended September 30, 2024, compared to the same period in 2023[123] - Investment income increased by $8.0 million, or 19%, for the three months ended September 30, 2024, compared to the same period in 2023[119] Medical Loss Ratio and Expenses - The medical loss ratio (MLR) is a key metric indicating the ratio of medical expenses to net premiums, which is subject to federal and state minimum requirements[97] - Medical Loss Ratio (MLR) was 84.6% for the three months ended September 30, 2024, compared to 83.8% for the same period in 2023[122] - Medical expenses are influenced by seasonal patterns, with higher costs typically occurring in the second half of the year due to various factors[107] Capital and Cash Flow - The combined statutory capital and surplus of health insurance subsidiaries was $1,068.0 million as of September 30, 2024, exceeding minimum capital requirements[132] - Health insurance subsidiaries issued dividends and made loan repayments of $133 million to the Parent during the nine months ended September 30, 2024[133] - For the nine months ended September 30, 2024, the company made capital contributions of $99.8 million to its health insurance subsidiaries, compared to $16.5 million for the same period in 2023[134] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $631.4 million, an increase from a net cash outflow of $569.0 million for the same period in 2023[146] - Net cash used in investing activities for the nine months ended September 30, 2024, was $1,356.0 million, compared to net cash provided of $404.7 million for the same period in 2023[147] - Net cash provided by financing activities for the nine months ended September 30, 2024, was $64.6 million, up from $5.4 million for the same period in 2023, primarily due to proceeds from stock option exercises[148] Regulatory and Operational Developments - The company has announced it will not renew the Cigna+Oscar Small Group arrangement, effective December 31, 2024, and will exit the small group market entirely by December 15, 2024[112] - Oscar Health is monitoring regulatory developments, including changes to the ACA broker process to address unauthorized enrollment changes[111] - A cybersecurity incident involving Change Healthcare occurred on February 21, 2024, but no breach of member data has been reported[113] Investment and Financial Strategy - The company estimates that without quota share reinsurance arrangements, its health insurance subsidiaries would have needed to hold approximately $520.0 million and $447.1 million of additional capital as of September 30, 2024, and December 31, 2023, respectively[134] - The fair value of the company's investments would decrease by approximately $44.1 million with a hypothetical and immediate 1% increase in interest rates as of September 30, 2024[150] - The company has $115.0 million available to draw under its Revolving Credit Facility until December 2025, with no outstanding borrowings as of September 30, 2024[141] - The company expects cash flows from operations to primarily fund its long-term cash requirements under various contractual obligations[138] - The company’s investment policies are designed to provide liquidity, preserve capital, and maximize total return on invested assets, consistent with state requirements[144]