Healthcare is a sector with the potential for massive disruption due to artificial intelligence (AI). Chatbots will help organize data and tailor personalized solutions for individuals, eliminating busywork and saving costs while also providing a better health outcome. At least, that is the theory.
One stock at the forefront of AI innovation in health insurance is Oscar Health (OSCR 3.21%). The tech-forward health insurer is gaining market share in the individual market and is already deploying AI tools for members.
Here's why now is a great time to buy Oscar Health stock and ride the telehealth AI wave.
Image source: Getty Images.
Building better health insurance
Unlike other insurers, Oscar Health offers complimentary telehealth services to its members, making it a table-stakes feature for healthcare in 2026.
Overall, Oscar Health has built a technology-focused health insurance platform for individual buyers of health insurance. It utilizes better working technology/mobile applications, simple interfaces, and cloud-based software to improve customer happiness and lower costs. Many people waste unnecessary time dealing with the confusing legacy health insurance industry, especially when it is an opaque plan provided by your employer.
Oscar Health is targeting people who have to (or choose to) pay for their own health insurance through the Affordable Care Act (ACA) marketplace. This allows Oscar Health to compete in a free market for individual buyers, and it has been able to gain share in a big way in the select states where it has launched over the last decade. It currently has 2 million paying members, up from just around 200,000 in 2019. That is an impressive level of market share gain that should continue as the insurer steadily goes live in new states.
Management is not resting on its laurels. It keeps pushing to build new products for customers, most recently through an AI chatbot called Oswell that is powered by OpenAI and can help members easily manage their healthcare information through Oscar's platform.
NYSE: OSCR
Key Data Points
Short-term headwinds mean a buying opportunity
If Oscar Health is gaining so much market share, you might be confused as to why the stock is down over 50% since its public market debut in 2021. It is for two reasons, both of which are fixable in 2026 and beyond.
First, healthcare costs rose faster than insurers projected in 2025, which led to claims outpacing premiums and, therefore, declining profitability. Oscar Health was not immune to this, but it has simply raised prices on its plans by 28% for 2026, which is right around where the rest of the industry is.
Secondly, and more concerning, is the expiration of health insurance subsidies in 2026. These subsidies for ACA customers made it much easier for low-income people to get free health insurance, which Oscar Health benefited from. If these subsidies are not extended, Oscar Health is going to lose customers in 2026.
This is obviously not ideal, but it isn't the end of the world for the business and should be a single one-time reset for operations. More important is getting back to profitability through price increases in 2026, even at a lower customer level.
Right now, Oscar Health is not profitable, but it expects to generate at least $12 billion in revenue this year compared to a current market cap of under $4 billion. As long as the company can reprice its insurance plans properly and get back to profitability, this current market cap looks like a steal for anyone looking to buy today and hold for the long term.
