Ahead of the company’s second-quarter earnings call Aug. 6, Oscar Health is slashing its full-year guidance by about half a billion dollars.
The insurer is expecting a loss from operations of $200 million to $300 million just months after estimating earnings from operations of $225 million to $275 million, partly due to elevated utilization.
Oscar’s medical loss ratio is also climbing to between 86% and 87%, more than 5% higher than initially proposed. Total revenue is projected to climb to no more than $12.2 million.
Wakely, an actuarial firm analyzing claims submissions through the end of April for Affordable Care Act (ACA) marketplace carriers, determined marketplace risk scores have risen more than Oscar previously estimated. The company foresees a net loss of $228 million for the second quarter.
“We are taking appropriate pricing actions for 2026 that reflect higher acuity in the individual market, and we will continue to take steps to deliver for our members, partners, and shareholders,” said Oscar Health CEO Mark Bertolini in a statement. “Oscar has successfully navigated dynamic markets before and we remain committed to our long-term strategy to bring more employees, individuals, and families healthcare choices that fit their needs through the individual market.”
A similar analysis, also conducted by Wakely, prompted Centene to pull back its guidance earlier this month. Centene was told market growth in 22 of its states would fall short of expectations and that its full-year risk adjustment transfer would be $1.8 billion lower than estimated.
Insurers are trying to adapt to a new landscape. Elevance Health lowered guidance, as did UnitedHealth Group. Aetna announced the company would pull itself off the individual markets next year.
Health plans are also expected to raise premiums dramatically, according to review of state filings by KFF. The median proposed increase for next year is 15%, as insurers worry about tariff policy, the expiration of enhanced premium subsidies and impacts to the ACA from President Donald Trump’s recently signed reconciliation law.
Last quarter, Oscar Health recorded a net income of $275 million and revenue of $3 billion with 2 million members. Bertolini warned on the call the Centers for Medicare & Medicaid Services’ regulation to shorten the enrollment window would “constrain” Americans looking to shop for new health insurance.