Oscar(US:OSCR)2026-02-13 21:27Membership Growth - As of December 31, 2025, Oscar has approximately 2.0 million effectuated members, a significant increase from 1.7 million in 2024, representing a growth of 21.8%[34] - The company reported a significant increase in membership in key states, such as Florida, which grew from 871,881 in 2024 to 1,179,934 in 2025, a growth of 35.3%[37] - Medicaid redeterminations began on April 1, 2023, contributing to membership increases in 2024, but not significantly in 2025[82] Revenue Sources - For the year ended December 31, 2025, 93% of premiums were earned directly from the Centers for Medicare & Medicaid Services (CMS), while 7% were from members[32] Market Expansion - Oscar expanded its market offerings from 18 states in 2025 to 20 states in 2026, indicating a strategic market expansion[31] Technology and Engagement - The +Oscar platform serves nearly 0.6 million client lives on its Campaign Builder platform, in addition to the 2.0 million members enrolled in Oscar health insurance[27] - Oscar's technology platform enhances member engagement and operational efficiencies, contributing to a high net promoter score well above the industry average during Q4 2025[46] - The company utilizes a digital engagement platform as a key element of its retention strategy, enhancing member experience and engagement[63] Strategic Priorities - The company believes that the Individual Coverage Health Reimbursement Arrangement (ICHRA) will disrupt employer group coverage and expand individual insurance options[50] - Oscar's strategic priorities include building a consumer health marketplace focused on choice, quality, and affordability, while driving market growth and product innovation[51] Workforce and Employment - As of December 31, 2025, Oscar employed approximately 2,305 individuals, emphasizing a diverse workforce aligned with the company's mission[52] Risk Management - Oscar's reinsurance agreements are designed to enhance risk management and capital efficiency, with no premiums paid for federal and state-run reinsurance programs[42] - As of December 31, 2025, the risk-based capital levels of the company's Health Insurance Subsidiaries are expected to meet or exceed all applicable mandatory requirements[76] Regulatory Compliance - Regulatory compliance is critical, with the company subject to extensive federal and state laws that govern its operations and require regular reporting and audits[71][72] - The company maintains a HIPAA compliance program to adapt to new privacy and security regulations, ensuring protection of personal health information (PHI)[87] - The company is subject to the Payment Card Industry Data Security Standard (PCI-DSS) to protect credit card account data[91] - The company faces increased scrutiny and potential litigation risks due to the oversight responsibilities imposed by the ACA and related regulations[79] Financial Regulations - The ACA mandates a minimum Medical Loss Ratio (MLR) of 80% for the individual market, with some states like New York requiring an 82% MLR[80] - Federal regulations require premium rate increases for individual products to be reviewed above specified thresholds, impacting pricing strategies[80] - The ACA risk adjustment program redistributes funds from plans with healthier members to those with higher-risk members, affecting overall premium stability[80] Cybersecurity and Data Protection - The company has implemented a comprehensive program of security measures to protect its information systems and data, including encryption and intrusion detection systems[69] - New cybersecurity regulations proposed by HHS aim to strengthen protections against cyberattacks targeting the healthcare system[86] Market Risks - Market risk exposure primarily arises from potential changes in interest rates, which could impact financial position and investment income[393] - A hypothetical 1% increase in interest rates could decrease the fair value of the company's investments by approximately $44.4 million[394] Legal and Compliance Risks - The company may face liabilities under various fraud, waste, and abuse laws, including the False Claims Act (FCA), which could result in significant financial penalties[92] - Increased scrutiny by the Department of Justice (DOJ) on health plans' diagnosis coding and risk adjustment practices, particularly for Medicare Advantage plans, could impact operations[93] - The company is required to maintain compliance programs to prevent, detect, and remediate fraud, waste, and abuse, which are subject to ongoing review and updates[94] - Future assessments under state insolvency or guaranty association laws cannot be predicted with certainty, but they may occur based on premium amounts received[95] Corporate Governance - The company aims to promote a transparent and systematic approach to human capital frameworks, with compensation decisions based on benchmarking data and performance, ensuring parity within similar roles[57] - The company’s arrangements with Oscar Medical Group are subject to corporate practice of medicine laws, which may affect virtual healthcare services availability[96]