Oscar(US:OSCR)2025-05-07 23:11Membership and Growth - As of March 31, 2025, Oscar Health, Inc. has approximately 2.0 million effectuated members actively enrolled in its plans[90]. - Membership increased to 2,039,467 as of March 31, 2025, up from 1,448,408 in 2024, with individual and small group membership rising to 2,021,484[121]. - Medicaid redeterminations initiated on April 1, 2023, have previously contributed to membership increases, but future impacts are expected to be less significant[100]. - The company anticipates lower Special Enrollment Period (SEP) membership growth throughout 2025, which may affect per member levels of premiums and claims[102]. - Regulatory developments, including changes to the Affordable Care Act (ACA) and the implementation of Program Integrity Rules, may impact membership growth and overall market participation[96][98]. Financial Performance - Total revenue for the three months ended March 31, 2025, was $3,046.3 million, a 42.3% increase from $2,142.3 million in the same period in 2024[118]. - Premium revenue increased by $902.1 million, or 43%, for the three months ended March 31, 2025, compared to the same period in 2024, driven by higher membership[120]. - Earnings from Operations is calculated as total revenue minus total operating expenses, serving as a primary metric for assessing operating performance[94]. - Net income attributable to Oscar Health, Inc. is a key indicator of profitability and operational efficiency, allowing for informed strategic planning[95]. Medical Expenses and Ratios - Medical expenses rose by $704.9 million, or 45%, for the three months ended March 31, 2025, primarily due to increased membership[124]. - The Medical Loss Ratio (MLR) is a key metric indicating medical expenses as a percentage of net premiums, which is subject to federal and state minimum requirements[92]. - Medical Loss Ratio (MLR) increased to 75.4% for the three months ended March 31, 2025, compared to 74.2% in 2024[118]. Administrative and Operating Expenses - The Selling, General and Administrative Expense Ratio (SG&A Expense Ratio) reflects the company's ability to manage its overall administrative cost base as a percentage of total revenue[93]. - Selling, general, and administrative expenses increased by $88.6 million, or 22%, for the three months ended March 31, 2025, due to higher distribution and selling expenses[126]. Cash Flow and Investments - Net cash provided by operating activities for the three months ended March 31, 2025, was $878.5 million, compared to $634.4 million for the same period in 2024, reflecting a 38.5% increase[150]. - Net cash used in investing activities for the three months ended March 31, 2025, was $174.2 million, a decrease from $300.6 million in the same period of 2024, indicating a reduction in security purchases[151]. - Net cash provided by financing activities for the three months ended March 31, 2025, was $4.9 million, down from $27.3 million in the same period of 2024, showing a significant decrease[152]. - Total cash and cash equivalents and investments held by health insurance subsidiaries were $4,742.1 million as of March 31, 2025, up from $3,808.0 million in December 2024[130]. - The combined statutory capital and surplus of health insurance subsidiaries was approximately $1,520.3 million as of March 31, 2025, exceeding minimum capital requirements[131]. Tax and Regulatory Considerations - The effective tax rate was approximately 4.41% for the three months ended March 31, 2025, compared to 0.56% in 2024[127]. - The risk adjustment programs administered by CMS are designed to mitigate adverse selection and provide revenue stability, with estimates subject to variability based on member risk profiles[104][105]. Market and Investment Risks - Market risk exposure is primarily due to potential changes in interest rates and inflation, impacting investment income and interest expense[153]. - The fair value of investments would decrease by approximately $43.9 million with a hypothetical 1% increase in interest rates as of March 31, 2025[154]. - Investment policies require that U.S. corporate bonds and asset-backed securities have final maturities of no more than five years[145]. - Restricted investments primarily consist of cash and cash equivalents and U.S. Treasury securities, classified as long-term due to regulatory requirements[147]. - Cash flows from operations may differ substantially from net income due to non-cash charges or changes in balance sheet accounts[148].