Obamacare Insurer Oscar Health, Hit By Higher Costs, Sees 2026 Rebound

Oscar Health Wednesday reported a $228 million second quarter loss but sees profits returning next year as the health insurance industry navigates an influx of sicker-than-expected patients, the company said August 6, 2025.

Oscar Health photo

Oscar Health Wednesday reported a $228 million second quarter loss but sees profits returning next year as the health insurance industry navigates an influx of sicker-than-expected patients.

Oscar has more than 2 million health plan members as one of the nation’s largest providers of individual coverage under the Affordable Care Act, also known as Obamacare. Oscar’s total membership was up 28% to more than 2 million compared to the second quarter of last year, helping total revenue jump 29% to nearly $2.9 billion in the second quarter.

But Oscar reported a second-quarter loss of $228.4 million, or 89 cents a share, which is a $285 million swing from the second quarter of last year when the company reported a profit of $56.2 million, or 20 cents a share.

A parade of health insurers, particularly those like Oscar that provide government-subsidized health insurance, have been hit hard by higher costs, lowering their profit forecasts and announcing plans to increase rates next year to cover the costs of a sicker pool of patients.

Health insurers have also been hit hard by rising costs in the last two years in part because consumers have a pent up demand for healthcare following the COVID-19 pandemic when many patients delayed treatment.

In Oscar’s case, the insurer blamed the rising costs in the quarter partly on an influx of sick patients that had been insured by Medicaid coverage for poor Americans buying individual coverage. Meanwhile, healthier patients are leaving the individual market.

Citing an “overall increase in market morbidity,” Oscar’s medical loss ratio, which is the percentage of the premium spent on medical care, ballooned to 91.1% in the second quarter compared to 79% in the year-ago quarter. Medical loss ratios in the mid to low 80^th percentile are considered good for most health insurers.

Still, Oscar chief executive officer Mark Bertolini — the first CEO to turn the company profitable when he did so last year after more than a decade of losses since the health insurer was founded in 2012 – remains bullish on the individual health insurance market.

“We believe the individual market has long-term upside and is the future of healthcare,” Bertolini said in a statement accompanying the company’s earnings report. “Oscar is well-positioned to manage through the market reset in 2025. We believe the market will stabilize next year and expect to return to profitability in 2026. We are building the individual market into a healthcare marketplace for more consumers and businesses, and continue to position the company for long-term growth.”