What Needs To Be True To Buy Oscar Health Stock Now?
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Over the past year, Oscar Health (OSCR) stock returned 80.1%, compared with 11.9% for the S&P 500. A buyer today pays for a turnaround that is only two quarters old. Oscar lost money in the last two quarters of 2025 before earning $362 million in the second quarter of 2026. Older claims that cost less than the company had set aside helped generate that profit. Management said the benefit also included a final 2025 CMS risk adjustment report that came in about $160 million better than Oscar had accrued. So how much of Oscar’s 2026 profit comes from the business it is running now?
How Much Of Oscar’s Profit Came From Past Claims?
Not most of it. Management counted $232 million of benefits from older claims in the first half of 2026, a period when Oscar earned about $1 billion of net income. Without the part of that benefit booked in the second quarter, Oscar paid out about 82% of its premiums in medical costs that quarter, management said. That compares with the 79.2% the company reported.
Oscar also became more efficient outside medical care. Its administrative expense ratio dropped to a record low of 14.2%. Management credits tighter spending and technology for the improvement. Management then raised its full-year guidance for earnings from operations by $250 million to a range of $500 million to $700 million. While that range uses a different measure from net income, it sits below what Oscar earned in the first half. On the guidance measure, the second quarter alone earned $389 million, so the range points to a weaker second half. Management said the higher outlook reflects both the older-claims benefit and favorable market trends.
The losses of late 2025 remain part of the twelve-month figures. Over the four quarters ending in June 2026, Oscar kept 3.6% of its revenue as net profit, against 13.4% for the S&P 500. The stock trades at 17.8 times those twelve-month earnings, compared with 22.8 for the index. Those earnings mix two losing quarters with two profitable ones. That multiple will change as the 2025 losses drop out and quarters without older-claims benefits take their place.
Can Oscar Keep Adding Members As ACA Membership Falls?
So far it has. Oscar ended June 2026 with 2.96 million members, up 46% from a year earlier. Membership across the whole ACA market stands at 19.2 million, down 12%. Management expects the market to shrink further.
The second half of 2026 is less certain. Management now expects churn, or members dropping their plans, to run at about twice the 1% to 2% it had planned as CMS checks on member eligibility continue. It calls that a timing shift that does not change revenue, and says its guidance already allows for lapsed members. Some members also moved into higher-deductible Bronze plans. Management expects their use of care to pick up through the second half as they burn through their deductibles.
Oscar Stock Falls Further Than The Market In Shocks
In each of five market shocks since 2022, Oscar lost more than the S&P 500, often by a wide margin. During the 2022 inflation shock, Oscar fell 58% while the index dropped 24%. In the 2023 regional banking crisis, Oscar fell 36% against 6.7% for the index. Day-to-day swings are large too: Oscar shares moved more than 11% in a single session at least five times in the past year. A position in Oscar can fall far deeper than the market, and you would want it sized for that.
For that risk to pay off, Oscar’s profit has to hold up without older-claims benefits while ACA membership shrinks. Oscar is expected to report its third quarter of 2026 on November 5, 2026. The share of premiums it paid out in medical costs is the figure to watch, measured against the 81.5% to 82.5% management expects for the full year.
Now You Know Oscar Health. Here Is A Better Way To Invest
Before you decide on OSCR, consider owning 30 quality companies instead of one. The Trefis High Quality (HQ) Portfolio has returned 105% since its September 2020 launch, ahead of a benchmark that combines the S&P 500, S&P MidCap and Russell 2000.
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