Oscar Health reported a $275 million in first quarter profits as the health insurer’s … More
Oscar Health reported a $275 million first quarter profit as the health insurer’s enrollment hit yet another record, surpassing two million individual and small group members.
The provider of individual coverage under the Affordable Care Act, also known as Obamacare, Wednesday reported net income of $275.3 million, or 92 cents a share, for the first quarter ended March 31 compared to $177.4 million, or 62 cents a share in the first quarter of last year.
The continuing financial improvement of Oscar comes a little more than two years after the health insurer hired Mark Bertolini as chief executive officer. Founded in 2012, Oscar didn’t become profitable until last year, but Bertolini – the former CEO of Aetna who was tapped as Oscar’s top executive in March of 2023 – and his team have delivered on their promises as they remain bullish on the individual health insurance market.
Oscar ended the first quarter with about 2 million total health plan members, which was up more than 40% over the year-ago quarter when the company had about 1.4 million individual and small group members. Oscar said the growth included both “solid retention and new membership growth.” That big increase in growth contributed to a 42% increase in revenue to $3 billion in the first quarter compared to $2.1 billion in the year-ago period.
“Oscar reported strong financial results in the first quarter,” Bertolini said.
Oscar, which benefited from the influx of Americans who signed up for Obamacare last year, provides health benefits in 18 states.
“We delivered continued top-line growth and bottom-line performance with significant year-over-year increases in revenue and net income,” Bertolini said. “We continue to expect meaningful margin expansion this year as we deliver superior value to our members and partners.”
Even as Oscar grows its membership, the company is also keeping its costs relatively in check at a time rivals have been struggling with rising medical expenses. Oscar’s medical loss ratio, which is the percentage of premium revenue that goes toward medical costs, rose slightly to 75.4% in the first quarter compared to 74.2% in the year-ago period.
Whether such Obamacare momentum and growth continues after this year in the broader market is uncertain. Enhanced subsidies many Obamacare enrollees used to buy coverage is set to expire at the end of this year, and Donald Trump and Republicans in Congress may be unwilling to spend the money to extend them. That debate is expected to take place in the coming weeks as Congress works on a budget.