Oscar Health closed the first quarter with 2 million members, revenue of $3 billion and a net income of $275 million, but discussion over federal policy stole the conversation during an earnings call May 7.
CEO Mark Bertolini discussed recent Centers for Medicare & Medicaid Services (CMS) policy regulations, noting he supported program integrity initiatives broadly but differed on certain proposed changes.
“However, rules such as the shortened enrollment window will constrain Americans’ ability to shop amid many enrollment changes for 2026,” he said.
In March, the CMS attempted to crack down on improper payments in the marketplace by shortening the current open enrollment period on Dec. 15, rather than the traditional deadline in January. It also eliminated the monthly special enrollment period for households at 150% of the federal poverty level.
“The shortened enrollment period does not allow for enough shopping for individuals and brokers who will have to both comply with these regulations,” he said.
That’s against a backdrop where ACA enhanced subsidies may not be extended at the end of the year, resulting in fewer covered individuals. Many Oscar members utilize these premiums.
Earlier this month, Aetna announced the company would exit the Affordable Care Act exchanges. The company has about 1 million members in its exchange plans, but CVS Health has struggled in recent months. Members currently with competitors—where there is overlap with Oscar’s target customer base—will need to find a new plan and may be hindered by a shortened enrollment period, Oscar executives said on the call.
Another policy thrown out by congressional members looking for cost savings ahead of a massive reconciliation bill is the reintroduction of cost-saving reductions.
“I think practically speaking, that’s a big undertaking for plans to try to put into place the processes and infrastructure,” said Chief Financial Officer Scott Blackley. “So, we will be recommending that the government not move forward with that in 2026.”
In the individual coverage health reimbursement arrangement space, of which Oscar has been a leading proponent, the company is seeing “increased momentum” and larger groups in the mid-market are more interested. Lawmakers are beginning to see the benefit of tax credits dedicated toward these plans and lobbying efforts could soon bear fruit, said Bertolini.
Oscar also highlighted its virtual urgent care live chat, which decreased member response times by 90%, and the company’s launch of Oscar Community Resources with FindHelp, a social care network that gives access to certain social determinants of health support.
The company recorded an earnings per share of $0.92, beating estimates of $0.83. Medical loss ratio increased by 120 basis points to 75.4%, while Oscar recorded the lowest selling, general and administrative expense ratio in company history at 15.8%.
Oscar’s stock soared 30% higher at close.