Oscar Health (OSCR -3.60%), a technology-focused health insurance provider, released results for the second quarter of 2025 on August 6, 2025, offering a mix of headline growth and operational setbacks. The most notable news: Revenue (GAAP) climbed 29.0% year over year to $2.86 billion, propelled by a sharp rise in plan membership. However, The quarter delivered a net loss of $228.4 million (GAAP). GAAP earnings per share (EPS) missed estimates by $0.08. Revenue targets (GAAP) were missed by $54.7 million. These results were driven by a spike in the medical loss ratio (MLR)—a core insurance profitability metric—to 91.1%, reflecting increased costs and unfavorable risk adjustment. Despite these setbacks, management held firm to its full-year guidance for fiscal 2025, citing expectations that current market challenges will settle in the coming year.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.89) | $(0.81) | $0.20 | N/A |
| Revenue (GAAP) | $2,863.9 million | $2,918.6 million | $2,219.3 million | 29.1 % |
| Medical Loss Ratio | 91.1 % | 79.0 % | 12.1 pp | |
| SG&A Expense Ratio | 18.7 % | 19.6 % | (0.9) pp | |
| Adjusted EBITDA | $(199.4 million) | $104.1 million | -291.6 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report.
Oscar Health’s Business Model, Recent Focus, and Key Success Factors
Oscar Health operates as a health insurer emphasizing technology and member experience. Its platform uses digital tools to provide real-time support, navigation, and engagement for members, aiming to differentiate in the crowded insurance field by focusing on operational efficiency and customer service.
Oscar’s key priorities have included growing its membership base, improving its technology platform, and managing regulatory compliance. Success depends heavily on pricing discipline, claims management, maintaining competitive provider networks, and leveraging its technology stack to reduce administrative costs. The company also engages in risk management through reinsurance, a common strategy in insurance to share large costs with other firms. Staying competitive means keeping its medical loss ratio—the proportion of premiums paid out for member healthcare—within controllable bounds while growing market share. Oscar Health calculates the medical loss ratio as a percentage of net premiums before ceded quota share reinsurance, including the impact of the federal risk adjustment program.
Quarter Highlights: Membership, Margins, and Market Movement
Total membership rose 28% year over year to 2,027,148. The majority of this growth came from its individual and small group plans, which increased 32.5% year over year to 2,017,058 members as of June 30, 2025. Conversely, Oscar’s Cigna+Oscar business—a partnership channel—contracted rapidly, declining from 58,293 members as of June 30, 2024, to just 10,090 as of June 30, 2025. While strong member growth fueled higher revenue, the company noted, “The increase was primarily driven by higher membership, partially offset by an increase in the net risk adjustment transfer accrual.”
Despite these gains, Oscar’s profitability (GAAP) worsened sharply. The medical loss ratio, which captures the share of premiums spent on claims, jumped to 91.1% from 79.0% a year earlier. A high MLR makes it difficult for an insurer to cover its other costs and turn a profit. Oscar linked the increase to “an increase in average market morbidity”—meaning more expensive claims—and negative risk adjustment, a regulatory process that redistributes funds among insurers based on the risk profile of their members. Net loss (GAAP) reached $228.4 million, a reversal from the $56.2 million profit in the prior-year period. Adjusted EBITDA—a widely used profit measure that excludes some non-cash expenses—deteriorated to a $199.4 million loss, compared to a $104.1 million profit in Q2 2024.
Management highlighted that the spike in costs came from market-wide factors. It explained, “The increase was primarily driven by an increase in average market morbidity that resulted in an increase in the net risk adjustment transfer accrual.” In other words, more expensive member care put pressure on margins. With its selling, general, and administrative (SG&A) expense ratio falling to 18.7%.
Oscar reported little impact from reinsurance—a tool insurers often use to reduce their exposure to large claims—with “Net quota share impact” minimal at $(11.5) million. The company does not break out the effects of technology investments this quarter or offer detail about clinical or provider network strategies. In terms of strategic partnerships, the wind‑down of the Cigna+Oscar relationship marked a shift, but there was no update on new network initiatives or alliances.
Looking Ahead: Guidance, Risks, and What to Watch
The company held to its full-year guidance for fiscal 2025, restating financial targets set in its preliminary results on July 22, 2025. Management stated, “We believe the market will stabilize next year, and expect to return to profitability in 2026.” Investors will need to look for improved reporting in coming quarters for clarity on targets such as operating margin and membership growth rates.
Until detailed guidance emerges, investors and observers should pay close attention to the trajectory of Oscar’s claims costs and risk adjustment payments in subsequent periods. Market conditions in Affordable Care Act health plans appear volatile, and Oscar’s current profitability challenges relate directly to those pressures. It’s also worth watching how management addresses membership quality, pricing, and its strategy for technology deployment.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
