0001568651FALSE00015686512024-02-072024-02-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 7, 2024
Oscar Health, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware001-4015446-1315570
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

75 Varick Street, 5th Floor
New York, New York 10013
(Address of Principal Executive Offices) (Zip Code)
(646) 403-3677
(Registrant’s telephone number, including area code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbols
Name of each exchange
on which registered
Class A Common Stock, $0.00001 par value per shareOSCRNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02. Results of Operations and Financial Condition.
On February 7, 2024, Oscar Health, Inc. (the “Company”) announced the Company’s financial results for the fourth quarter and year ended December 31, 2023. A copy of the press release issued in connection with the announcement is attached and furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

The information in Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information and exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Oscar Health, Inc.
By:/s/ R. Scott Blackley
Name:R. Scott Blackley
Title:Chief Financial Officer
Date: February 7, 2024


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Oscar Health, Inc.
ir.hioscar.com
News Release

Oscar Health Announces Strong Results for Fourth Quarter and Full Year 2023; Introduces Full Year 2024 Outlook Including Total Company Adjusted EBITDA Profitability


February 7, 2024
•For the year ended December 31, 2023:
◦Direct and Assumed Policy Premiums of $6.6 billion, a 3% decrease YoY
◦Premiums earned of $5.7 billion, a 47% increase YoY
◦Medical Loss Ratio of 81.6%, a 370 bps improvement YoY
◦InsuranceCo Administrative Expense Ratio of 17.9%, a 270 bps improvement YoY
◦InsuranceCo Combined Ratio of 99.5%, a 640 bps improvement YoY
◦Adjusted Administrative Expense Ratio of 21.0%, a 350 bps improvement YoY
◦Net loss of $271 million, an improvement of $339 million YoY
◦Adjusted EBITDA loss of $45 million, an improvement of $417 million YoY

New York, NY, February 7, 2024 - Oscar Health, Inc. (“Oscar” or the “Company”) (NYSE: OSCR), a leading healthcare technology company, today announced its financial results for the fourth quarter and full year ended December 31, 2023.

“Oscar reported strong 2023 results with most core metrics exceeding our expectations for the full year. We delivered on our commitment for Insurance Company Adjusted EBITDA profitability and have a clear line of sight into consolidated Adjusted EBITDA profitability in 2024,” said Mark Bertolini, CEO of Oscar. “We are pleased to serve more than 1.3 million members this year and remain focused on driving long-term sustainable margin expansion.”

Total Direct and Assumed Policy Premiums for 2023 were $6.6 billion, down 3% year-over-year (“YoY”), driven primarily by lower membership, partially offset by rate increases. Premiums earned of $5.7 billion for the year increased 47% YoY, driven primarily by the impact of deposit accounting for quota share reinsurance agreements, and lower risk transfer per member as a percent of premiums.

Oscar’s InsuranceCo Combined Ratio, which is the sum of its Medical Loss Ratio (“MLR”) and the InsuranceCo Administrative Expense Ratio, improved 640 bps YoY to 99.5% for 2023, driven by both an improved MLR and administrative cost efficiencies. Specifically, the MLR improved 370 bps YoY to 81.6%, due to targeted rate increases and a disciplined pricing strategy and total cost of care initiatives. The InsuranceCo Administrative Expense Ratio improved 270 bps YoY to 17.9%, due to lower distribution expenses and higher net premiums as a result of lower risk transfer per member as a percent of premiums.

The Adjusted Administrative Expense Ratio for 2023 improved 350 bps YoY to 21.0%, due to lower distribution expenses, higher net premiums as a result of lower risk transfer per member as a percent of premiums, and higher net investment income. The Adjusted EBITDA loss of $45 million improved by $417 million YoY, and decreased as a percentage of premiums before ceded reinsurance by 8 points as compared to the prior year. Net loss of $271 million improved by $339 million YoY and decreased as a percentage of premiums before ceded reinsurance by 7 points compared to the prior year.

The Company is introducing its outlook for 2024 including two new metrics, Total Revenue and SG&A Expense Ratio. The Company anticipates Total Revenue of $8.3 billion to $8.4 billion, a Medical Loss Ratio of 80.2% to 81.2%, a SG&A Expense Ratio of 20.5% to 21.0%, and Total Company Adjusted EBITDA of $125 million to $175 million. For more information on these metrics, see the “2024 Outlook and Supplemental Information” on page 3 in this release.


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Oscar Health, Inc.
News Release

Financial Results Summary
Three Months Ended December 31,Year Ended December 31,
(in thousands)2023202220232022
Premiums before ceded reinsurance$1,391,193 $1,332,931 $5,696,978 $5,334,520 
Reinsurance premiums ceded(798)(365,474)(10,909)(1,463,403)
Premiums earned$1,390,395 $967,457 $5,686,069 $3,871,117 
Total revenue$1,431,658 $995,127 $5,862,869 $3,963,638 
Total operating expenses$1,577,135 $1,217,606 $6,098,484 $4,553,505 
Net loss$(149,838)$(226,560)$(270,594)$(609,552)
Key Metrics and Non-GAAP Financial Metrics
Three Months Ended December 31,Year Ended December 31,
(in thousands, except percentages)2023202220232022
Direct and Assumed Policy Premiums$1,676,673 $1,784,012 $6,647,658 $6,842,439 
Medical Loss Ratio86.4 %91.6 %81.6 %85.3 %
InsuranceCo Administrative Expense Ratio18.8 %22.3 %17.9 %20.6 %
InsuranceCo Combined Ratio
105.2 %113.9 %99.5 %105.8 %
Adjusted Administrative Expense Ratio22.7 %26.0 %21.0 %24.6 %
Adjusted EBITDA (1)
$(111,593)$(189,656)$(45,238)$(462,255)
(1) Adjusted EBITDA is a non-GAAP measure. See “Key Operating and Non-GAAP Financial Metrics - Adjusted EBITDA” in this release for a reconciliation to net loss, the most directly comparable GAAP measure, and for information regarding Oscar’s use of Adjusted EBITDA.

Membership by OfferingAs of December 31,
20232022
Individual and Small Group967,002 1,084,404 
Medicare Advantage1,781 4,452 
Cigna + Oscar (1)
67,500 62,627 
Total Members1,036,283 1,151,483 
(1)Represents total membership for Oscar’s co-branded partnership with Cigna.

2024 Outlook and Supplemental Information

We regularly review a number of metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, and make strategic decisions. Beginning in 2024, the Company intends to provide guidance on four metrics: Total Revenue, Medical Loss Ratio, SG&A Expense Ratio and Adjusted EBITDA. The following table presents the Company’s 2024 financial outlook, along with full year 2023 results for such measures, calculated in accordance with the Company’s intended reporting approach for future periods.

The information included in this table represents management's current estimates as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates. The historical financial information included in this table is unaudited and has no impact on the Company’s audited financial statements and results of operations to be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

2
Oscar Health, Inc.
News Release

Oscar Health, Inc.
2024 Financial Guidance Summary
Full Year 2024 Outlook
(in thousands, except percentages)Full Year 2023 ActualLowHigh
Total Revenue (1)
$5,862,869 $8,300,000 $8,400,000 
Medical Loss Ratio (2)
81.6 %80.2 %81.2 %
SG&A Expense Ratio (3)
24.3 %20.5 %21.0 %
Adjusted EBITDA (4) (5)
$(45,238)$125,000 $175,000 
(1) Total Revenue includes Net Premiums, Service revenue generated from our +Oscar business, and Investment (and other) income. We believe Revenue is an important metric to assess the growth of our insurance business and our +Oscar business, as well as the earnings potential of our investment portfolio.
(2) Medical loss ratio (MLR) is total medical expenses incurred less any member cost sharing as a percentage of premiums before ceded reinsurance. We believe MLR is an important metric to demonstrate the ratio of our costs to pay for healthcare of our members to the premiums before ceded reinsurance.
(3) The Selling, General, and Administrative (SG&A) Expense ratio is calculated as selling, general and administrative expenses as a percentage of Total Revenue. We believe the SG&A Expense ratio is useful to evaluate our ability to manage our overall selling, general, and administrative cost base.
(4) Adjusted EBITDA, a non-GAAP measure, is defined as Net Income (Loss) for the Company and its consolidated subsidiaries before interest expense, income tax expense (benefit), depreciation and amortization, as further adjusted for stock-based compensation, and other items that are considered unusual or not representative of underlying trends of our business, where applicable for the period presented. We present Adjusted EBITDA because we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry.
(5) Oscar has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net loss within this press release because Oscar is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to, stock-based compensation expense. These items, which could materially affect the computation of forecasted GAAP net loss, are inherently uncertain and depend on various factors, some of which are outside of Oscar’s control. As such, any associated estimate and its impact on GAAP net loss could vary materially.


3
Oscar Health, Inc.
News Release

Quarterly Conference Call Details
Oscar will host a conference call to discuss the financial results today, February 7, 2024, at 5:00 p.m. (ET). A live audio webcast will be available via the Investor Relations page of Oscar’s website at ir.hioscar.com. A replay of the webcast will be available for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

Non-GAAP Financial Information
This release presents Adjusted EBITDA and InsuranceCo Adjusted EBITDA, non-GAAP financial metrics, which are provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of historical non-GAAP financial information to the most directly comparable GAAP financial measure is provided in the accompanying tables found at the end of this release. For more information regarding Adjusted EBITDA, please see “Key Operating and Non-GAAP Financial Metrics” below.

Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained herein are forward-looking statements. These statements include, but are not limited to, statements about our financial outlook and estimates, including Total Revenue, Medical Loss Ratio, SG&A Expense Ratio and Adjusted EBITDA and other financial performance metrics, and the related underlying assumptions, our business and financial prospects, and our management’s plans and objectives for future operations, expectations and business strategy. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other similar expressions. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict and generally beyond our control.

Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: our ability to execute our strategy and manage our growth effectively; our ability to retain and expand our member base; heightened competition in the markets in which we participate; our ability to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs; our ability to achieve or maintain profitability in the future; changes in federal or state laws or regulations, including changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended (collectively, the “ACA”) and any regulations enacted thereunder; our ability to comply with ongoing regulatory requirements, including capital reserve and surplus requirements and applicable performance standards; changes or developments in the health insurance markets in the United States, including passage and implementation of a law to create a single-payer or government-run health insurance program; our, or any of our vendor’s, ability to comply with laws, regulations, and standards related to the handling of information about individuals or applicable consumer protection laws, including as a result of our participation in government-sponsored programs, such as Medicare; our ability to arrange for the delivery of quality care and maintain good relations with the physicians, hospitals, and other providers within and outside our provider networks; unanticipated results of, or changes to, risk adjustment programs; our ability to utilize quota share reinsurance to reduce our capital and surplus requirements and protect against downside risk on medical claims; unfavorable or otherwise costly outcomes of lawsuits and claims that arise from the extensive laws and regulations to which we are subject; our ability to attract and retain qualified personnel; incurrence of data security breaches of our and our partners’ information and technology systems; our ability to detect and prevent material weaknesses or significant control deficiencies in our internal controls over financial reporting or other failure to maintain an effective system of internal controls; adverse publicity or other adverse consequences related to our dual class structure or “controlled company” status; and the other factors set forth under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, filed with the Securities and Exchange Commission (“SEC”), and our other filings with the SEC, including our Annual Report on Form 10-K for the annual period ended December 31, 2023, to be filed with the SEC.

You are cautioned not to place undue reliance on any forward-looking statements made in this press release. Any forward-looking statement speaks only as of the date as of which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise.



4
Oscar Health, Inc.
News Release

About Oscar Health
Oscar Health, Inc. (“Oscar”) is the first health insurance company built around a full stack technology platform and a relentless focus on serving its members. At Oscar, our mission is to make a healthier life accessible and affordable for all. Headquartered in New York City, Oscar has been challenging the healthcare system's status quo since our founding in 2012. The company’s member-first philosophy and innovative approach to care has earned us the trust of one million members, as of December 31, 2023. We offer Individual & Family and Small Group plans, and +Oscar, our full stack technology platform, to others within the provider and payor space. Our vision is to refactor healthcare to make good care cost less. Refactor is a term used in software engineering that means to improve the design, structure, and implementation of the software, while preserving its functionality. At Oscar, we take this definition a step further. We improve our members’ experience by building trust through deep engagement, personalized guidance, and rapid iteration.

Investor Contact:
Chris Potochar
VP of Investor Relations
ir@hioscar.com

Media Contact:
Kristen Prestano
VP of Communications
press@hioscar.com


Source: Oscar Health, Inc.

5
Oscar Health, Inc.
News Release

Oscar Health, Inc.
Consolidated Statements of Operations

Three Months Ended December 31,Year Ended December 31,
(in thousands, except share and per share amounts)2023202220232022
(unaudited)(unaudited)(unaudited)
Revenue
Premiums before ceded reinsurance$1,391,193 $1,332,931 $5,696,978 $5,334,520 
Reinsurance premiums ceded(798)$(365,474)(10,909)(1,463,403)
Premiums earned1,390,395 967,457 5,686,069 3,871,117 
Administrative services revenue3,830 2,681 15,442 61,047 
Investment income and other revenue37,433 24,989 161,358 31,474 
Total revenue1,431,658 995,127 5,862,869 3,963,638 
Operating Expenses
Claims incurred, net1,205,239 884,904 4,642,024 3,280,798 
Other insurance costs206,379 195,859 824,457 706,439 
General and administrative expenses85,610 75,808 339,716 309,783 
Federal and state assessments74,311 71,788 290,725 281,518 
Premium deficiency reserve (release)5,596 (10,753)1,562 (25,033)
Total operating expenses1,577,135 1,217,606 6,098,484 4,553,505 
Loss from operations(145,477)(222,479)(235,615)(589,867)
Interest expense6,217 6,135 24,603 22,623 
Other expenses (income)(1,050)(1,339)7,082 (2,415)
Loss before income taxes(150,644)(227,275)(267,300)(610,075)
Income tax expense (benefit)(806)(715)3,294 (523)
Net loss(149,838)(226,560)(270,594)(609,552)
Less: Net income (loss) attributable to noncontrolling interests$192 $(514)$134 $(3,277)
Net loss attributable to Oscar Health, Inc. $(150,030)$(226,046)$(270,728)$(606,275)
Earnings (Loss) per Share
Net loss per share attributable to Oscar Health, Inc., basic and diluted$(0.66)$(1.05)$(1.22)$(2.85)
Weighted average common shares outstanding, basic and diluted227,082,062 215,194,230 221,655,493 212,474,615 
6
Oscar Health, Inc.
News Release

Oscar Health, Inc.
Consolidated Balance Sheets

(in thousands, except share and per share amounts)
December 31, 2023December 31, 2022
(unaudited)
Assets:
Current Assets:
Cash and cash equivalents1,870,315 1,558,595 
Short-term investments 689,833 1,397,287 
Premiums and accounts receivable (net of allowance for credit losses of $31,600 and $2,988)201,269 216,475 
Risk adjustment transfer receivable51,925 49,861 
Reinsurance recoverable241,194 892,887 
   Other current assets6,564 6,450 
Total current assets3,061,100 4,121,555 
Property, equipment, and capitalized software, net61,930 59,888 
Long-term investments365,309 222,919 
Restricted deposits29,870 27,483 
Other assets83,271 94,756 
Total Assets3,601,480 4,526,601 
Liabilities and Stockholders' Equity
Current Liabilities:
Benefits payable965,986 937,727 
Risk adjustment transfer payable1,056,941 1,517,493 
Premium deficiency reserve5,776 4,214 
Unearned premiums65,918 78,998 
Accounts payable and other liabilities273,367 297,841 
Reinsurance payable61,024 427,649 
Total current liabilities2,429,012 3,263,922 
Long-term debt298,777 297,999 
Other liabilities67,574 72,280 
Total liabilities2,795,363 3,634,201 
Commitments and contingencies
Stockholders' Equity
Class A common stock, $0.00001 par value; 825,000,000 shares authorized, 193,874,843 and 181,176,239 shares outstanding as of December 31, 2023 and 2022, respectively2 2 
Class B common stock, $0.00001 par value; 82,500,000 shares authorized, 35,514,201 and 35,115,807 shares outstanding as of December 31, 2023 and 2022, respectively— — 
Treasury stock (314,600 shares as of December 31, 2023 and 2022)(2,923)(2,923)
Additional paid-in capital3,682,294 3,509,007 
Accumulated deficit(2,876,715)(2,605,987)
Accumulated other comprehensive income (loss)1,309 (9,715)
Total Oscar Health, Inc. stockholders’ equity803,967 890,384 
Noncontrolling interests 2,150 2,016 
Total stockholders’ equity806,117 892,400 
Total Liabilities and Stockholders' Equity3,601,480 4,526,601 
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Oscar Health, Inc.
News Release
Oscar Health, Inc.
Consolidated Statements of Cash Flows

Year Ended December 31,
(in thousands)
20232022
(unaudited)
Cash flows from operating activities:
Net loss(270,594)$(609,552)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Deferred taxes58 (165)
Net realized loss (gain) on sale of financial instruments70 1,274 
Depreciation and amortization expense30,694 15,283 
Amortization of debt issuance costs778 713 
Stock-based compensation expense159,683 112,329 
Net amortization (accretion) of investments(29,374)2,480 
Provision for credit losses28,612 2,988 
Changes in assets and liabilities:
(Increase) / decrease in:
Premiums and accounts receivable(13,405)(81,049)
Risk adjustment transfer receivable(2,063)(9,202)
Reinsurance recoverable651,693 (460,897)
Other assets11,307 (243)
Increase / (decrease) in:
Benefits payable28,258 424,146 
Unearned premiums(13,080)3,953 
Premium deficiency reserve1,562 (25,033)
Accounts payable and other liabilities(29,180)57,811 
Reinsurance payable(366,626)222,418 
Risk adjustment transfer payable(460,552)723,095 
Net cash (used in) provided by operating activities(272,159)380,349 
Cash flows from investing activities:
Purchase of investments(836,982)(1,192,706)
Sale of investments31,857 360,616 
Maturity of investments1,410,166 633,467 
Purchase of property, equipment and capitalized software(25,577)(29,012)
Change in restricted deposits(2,277)1,116 
Net cash (used in) provided by investing activities577,187 (226,519)
Cash flows from financing activities:
Proceeds from long-term debt— 305,000 
Payments of debt issuance costs— (7,035)
Proceeds from joint venture contribution2,490 1,846 
Proceeds from exercise of stock options3,956 1,299 
Net cash provided by financing activities6,446 301,110 
Increase in cash, cash equivalents and restricted cash equivalents311,474 454,940 
Cash, cash equivalents, restricted cash and cash equivalents—beginning of period1,580,497 1,125,557 
Cash, cash equivalents, restricted cash and cash equivalents—end of period$1,891,971 $1,580,497 
Cash and cash equivalents1,870,315 1,558,595 
Restricted cash and cash equivalents included in restricted deposits21,656 21,902 
Total cash, cash equivalents and restricted cash and cash equivalents$1,891,971 $1,580,497 
Year Ended December 31,
(in thousands)
20232022
Supplemental Disclosures:
Interest payments$23,156 $10,079 
Income tax payments$2,414 $1,893 

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Oscar Health, Inc.
News Release

Key Operating and Non-GAAP Financial Metrics
We regularly review a number of metrics, including the following key operating and non-GAAP financial metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, and make strategic decisions. We believe these operational and financial measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP.

Members
Members are defined as any individual covered by a health plan that we offer directly or through a co-branded arrangement. We view the number of members enrolled in our health plans as an important metric to help evaluate and estimate revenue and market share. Additionally, the more members we enroll, the more data we have, which allows us to improve the functionality of our platform.

Direct and Assumed Policy Premiums
Direct policy premiums are defined as the premiums collected from our members or from the federal government during the period indicated, before risk adjustment and reinsurance. These premiums include APTC, or premium subsidies, which are available to individuals and families with certain annual incomes.

Assumed policy premiums are premiums we receive primarily as part of our reinsurance arrangement under our Cigna+Oscar Small Group plan offering, and are presented here net of risk adjustment.

We believe Direct and Assumed Policy Premiums is an important metric to assess the growth of our individual and small group plan offerings going forward. Management also views Direct and Assumed Policy Premiums as a key operating metric because Direct and Assumed Policy Premiums are a key input in the calculation of our MLR, InsuranceCo Administrative Expense Ratio, InsuranceCo Combined Ratio and Adjusted Administrative Expense Ratio.

Medical Loss Ratio
Medical Loss Ratio is calculated as set forth in the table below. Direct claims incurred before ceded reinsurance are medical claims, the total medical expenses incurred in order for members to utilize healthcare services less any member cost sharing. These services include inpatient, outpatient, pharmacy, and physician costs. Direct claims incurred before ceded reinsurance also include risk sharing arrangements with certain of our providers. The impact of the federal risk adjustment program is included in the denominator of our MLR. We believe MLR is an important metric to demonstrate the ratio of our costs to pay for healthcare of our members to net premiums before ceded quota share reinsurance. MLRs in our existing products are subject to various federal and state minimum requirements.

Three Months Ended December 31,Year Ended December 31,
(in thousands, except percentages)2023202220232022
Direct claims incurred before ceded reinsurance (1)
$1,158,278 $1,172,279 $4,459,702 $4,428,000 
Assumed reinsurance claims57,864 47,683 227,058 143,147 
Excess of loss ceded claims (2)
2,921 (4,316)(3,117)(18,632)
State reinsurance (3)
(17,102)(1,901)(43,676)(30,544)
Net claims before ceded quota share reinsurance (A)
$1,201,961 $1,213,745 $4,639,967 $4,521,971 
Premiums before ceded reinsurance$1,391,193 $1,332,931 $5,696,978 $5,334,520 
Excess of loss reinsurance premiums (4)
(717)(8,115)(8,698)(31,502)
Net premiums before ceded quota share reinsurance (B)
$1,390,476 $1,324,816 $5,688,280 $5,303,018 
Medical Loss Ratio (A divided by B)
86.4 %91.6 %81.6 %85.3 %
(1)See the Appendix to this release for a reconciliation of direct claims incurred to claims incurred, net appearing on the face of our statement of operations.
(2)Represents claims ceded to reinsurers pursuant to an excess of loss treaty, for which such reinsurers are financially liable. We use excess of loss reinsurance to limit the losses on individual claims of our members.
(3)Represents payments made by certain state-run reinsurance programs established subject to CMS approval under Section 1332 of the ACA.
(4)Represents excess of loss reinsurance premiums paid.





9
Oscar Health, Inc.
News Release
InsuranceCo Administrative Expense Ratio
InsuranceCo Administrative Expense Ratio is calculated as set forth in the table below. The ratio reflects the costs associated with running our insurance companies. We believe InsuranceCo Administrative Expense Ratio is useful to evaluate our ability to manage our expenses as a percentage of net premiums before quota share reinsurance. Expenses necessary to run the insurance companies are included in Other insurance costs and Federal and state assessments. These expenses include variable expenses paid to distribution partners and vendors, premium taxes and healthcare exchange fees, employee-related compensation, benefits, marketing costs, and other administrative expenses.

Three Months Ended December 31,Year Ended December 31,
(in thousands, except percentages)2023202220232022
Other insurance costs$206,379 $195,859 $824,457 $706,439 
Impact of quota share reinsurance (1)
(7,023)40,745 (30,454)154,741 
Stock-based compensation expense(11,458)(13,043)(66,060)(51,495)
Federal and state assessment of health insurance subsidiaries
73,915 71,471 289,647 281,049 
Health insurance subsidiary adjusted administrative expenses (A)
$261,813 $295,032 $1,017,590 $1,090,734 
Premiums before ceded reinsurance$1,391,193 $1,332,931 $5,696,978 $5,334,520 
Excess of loss reinsurance premiums (717)(8,115)(8,698)(31,502)
Net premiums before ceded quota share reinsurance (B)
$1,390,476 $1,324,816 $5,688,280 $5,303,018 
InsuranceCo Administrative Expense Ratio (A divided by B)
18.8 %22.3 %17.9 %20.6 %
(1)Includes ceding commissions received from reinsurers, net of the impact of deposit accounting of $(6,996) and $(1,788) for the three months ended December 31, 2023 and 2022, respectively and $(29,451) and $(7,205) for the year ended December 31, 2023 and 2022, respectively.


InsuranceCo Combined Ratio
InsuranceCo Combined Ratio is defined as the sum of MLR and InsuranceCo Administrative Expense Ratio. We believe this ratio best represents the core performance of the insurance business, prior to the impact of quota share and net investment income.
Three Months Ended December 31,Year Ended December 31,
2023202220232022
Medical Loss Ratio86.4 %91.6 %81.6 %85.3 %
InsuranceCo Administrative Expense Ratio18.8 %22.3 %17.9 %20.6 %
InsuranceCo Combined Ratio
105.2 %113.9 %99.5 %105.8 %
10
Oscar Health, Inc.
News Release
Adjusted Administrative Expense Ratio
The Adjusted Administrative Expense Ratio is an operating ratio that reflects the Company’s total administrative expenses (“Total Administrative Expenses”), net of non-cash and non-recurring items (as adjusted, “Adjusted Administrative Expenses”), as a percentage of total revenue, excluding the impact of quota share reinsurance premiums less excess of loss reinsurance premiums ceded (“Adjusted Total Revenue”). Total Administrative Expenses are calculated as Total operating expenses, excluding non-administrative insurance-based expenses and the impact of quota share reinsurance. Adjusted Administrative Expenses are Total Administrative Expenses, net of non-cash and non-recurring expense items. We believe Adjusted Administrative Expense Ratio is useful to evaluate our ability to manage our overall administrative expense base. This ratio also provides further clarity into our overall path to profitability.

Three Months Ended December 31,Year Ended December 31,
(in thousands, except percentages)2023202220232022
Total Operating Expenses$1,577,135 $1,217,606 $6,098,484 $4,553,505 
Claims incurred, net(1,205,239)(884,904)(4,642,024)(3,280,798)
Premium deficiency reserve (release)(5,596)10,753 (1,562)25,033 
Impact of quota share reinsurance (1)
(7,023)40,745 (30,454)154,741 
Total Administrative Expenses$359,277 $384,200 $1,424,444 $1,452,481 
Stock-based compensation expense(26,142)(29,088)(159,683)(112,329)
Depreciation and amortization(7,742)(3,735)(30,694)(15,283)
Adjusted Administrative Expenses (A)
$325,393 $351,377 $1,234,067 $1,324,869 
Total Revenue$1,431,658 $995,127 $5,862,869 $3,963,638 
Reinsurance premiums ceded798 365,474 10,909 1,463,403 
Excess of loss reinsurance premiums(717)(8,115)(8,698)(31,502)
Adjusted Total Revenue (B)
$1,431,739 $1,352,486 $5,865,080 $5,395,539 
Adjusted Administrative Expense Ratio (A divided by B)
22.7 %26.0 %21.0 %24.6 %
(1)Includes ceding commissions received from reinsurers, net of the impact of deposit accounting of $(6,996) and $(1,788) for the three months ended December 31, 2023 and 2022, respectively, and $(29,451) and $(7,205) for the year ended December 31, 2023 and 2022, respectively.


SG&A Expense Ratio
The Company is transitioning to the SG&A Expense Ratio as the operating ratio that reflects the Company’s administrative expenses, as a percentage of total revenue, without exclusions for the impact of quota share, premium deficiency reserve (release), or stock compensation. Total SG&A Expenses are calculated as Total operating expenses, less Claims incurred, net, and Depreciation and amortization. The SG&A Expense ratio is calculated as selling, general and administrative expenses as a percentage of Total Revenue. We believe the SG&A Expense Ratio is useful to evaluate our ability to manage our administrative expenses.

Three Months Ended December 31,Year Ended December 31,
(in thousands, except percentages)2023202220232022
Adjusted Administrative Expenses$325,393 $351,377 $1,234,067 $1,324,869 
Premium deficiency reserve (release)5,596 (10,753)1,562 (25,033)
Impact of quota share reinsurance (1)
7,023 (40,745)30,454 (154,741)
Stock-based compensation expense26,142 29,088 159,683 112,329 
Total SG&A Expenses (A)
$364,154 $328,967 $1,425,766 $1,257,424 
Total Revenue (B)
$1,431,658 $995,127 $5,862,869 $3,963,638 
SG&A Expense Ratio (A divided by B)
25.4 %33.1 %24.3 %31.7 %








11
Oscar Health, Inc.
News Release
Adjusted EBITDA
Adjusted EBITDA is defined as Net loss for the Company and its consolidated subsidiaries before interest expense, income tax expense (benefit), and depreciation and amortization as further adjusted for stock-based compensation, and other items that are considered unusual or not representative of underlying trends of our business, where applicable for the period presented. We present Adjusted EBITDA because we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Adjusted EBITDA is a non-GAAP measure. Management believes that investors’ understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing our ongoing results of operations.

We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate Adjusted EBITDA in the same manner.

Management uses Adjusted EBITDA:
•as a measurement of operating performance because it assists us in comparing the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations;
•for planning purposes, including the preparation of our internal annual operating budget and financial projections;
•to evaluate the performance and effectiveness of our operational strategies; and
•to evaluate our capacity to expand our business.

By providing this non-GAAP financial measure, together with a reconciliation to the most comparable U.S. GAAP measure, Net loss, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for Net loss or other financial statement data presented in our Consolidated Financial Statements as indicators of financial performance.

Three Months Ended December 31,Year Ended December 31,
(in thousands)2023202220232022
Net loss$(149,838)$(226,560)$(270,594)$(609,552)
Interest expense6,217 6,135 24,603 22,623 
Other expenses (income)(1,050)(1,339)7,082 (2,415)
Income tax expense (benefit)(806)(715)3,294 (523)
Depreciation and amortization (“D&A”)7,742 3,735 30,694 15,283 
Stock-based compensation (“SBC”) (1)
26,142 29,088 159,683 112,329 
Adjusted EBITDA$(111,593)$(189,656)$(45,238)$(462,255)
General and administrative expenses (excluding SBC and D&A)$70,505 $59,341 $244,085 $246,735 
Administrative services revenue$(3,830)$(2,682)$(15,442)(61,047)
Investment income and other revenue (Non-InsuranceCo)$(4,735)$(2,027)$(14,672)$(5,711)
InsuranceCo Adjusted EBITDA (2)
$(49,653)$(135,024)$168,733 $(282,278)
(1)Represents non-cash expenses related to equity-based compensation programs, which vary from period to period depending on various factors including the timing, number, and the valuation of awards. Year ended December 31, 2023 includes a non-recurring charge of $46.3 million related to accelerated stock-based compensation expense recognized as a result of the cancellation of the Founders Awards previously granted to Mario Schlosser and Joshua Kushner.
(2)We believe that InsuranceCo Adjusted EBITDA provides investors with additional insight into the earnings and capital generation potential of the Company’s insurance subsidiaries.


12
Oscar Health, Inc.
News Release



Appendix

Oscar Health, Inc.
News Release
Reinsurance Impact

Three Months Ended December 31,Year Ended December 31,
(in thousands)2023202220232022
Quota share ceded premiums$222 $(372,168)$7,329 $(1,489,525)
Quota share ceded claims(3,277)328,841 (2,056)1,241,173 
Ceding commission, net of deposit accounting impact (1)
(7,023)40,745 (30,454)154,741 
Experience refund(302)14,809 (9,540)57,625 
Net quota share impact$(10,380)$12,227 $(34,721)$(35,986)
(1)Includes ceding commissions received from reinsurers, net of the impact of deposit accounting of $(6,996) and $(1,788) for the three months ended December 31, 2023 and 2022, respectively, and $(29,451) and $(7,205) for the year ended December 31, 2023 and 2022, respectively.

The composition of total reinsurance premiums ceded and reinsurance premiums assumed, which are included as components of total premiums earned in the consolidated statement of operations, is as follows:

Three Months Ended December 31,Year Ended December 31,
(in thousands)2023202220232022
Reinsurance premiums ceded, gross(1,458)(380,592)56 (1,524,157)
Experience refunds660 15,118 (10,965)60,754 
Reinsurance premiums ceded(798)(365,474)(10,909)(1,463,403)
Reinsurance premiums assumed54,620 41,815 228,786 138,109 
Total reinsurance premiums (ceded) and assumed, net 53,822 (323,659)217,877 (1,325,294)

The Company records claims expense net of reinsurance recoveries. The following table reconciles the total claims expense to the net claims expense as presented in the consolidated statement of operations:

Three Months Ended December 31,Year Ended December 31,
(in thousands)2023202220232022
Direct claims incurred1,158,278 1,172,279 4,459,702 4,428,000 
Ceded reinsurance claims(10,903)(335,058)(44,736)(1,290,349)
Assumed reinsurance claims57,864 47,683 227,058 143,147 
Claims incurred, net1,205,239 884,904 4,642,024 3,280,798 

The Company records selling, general and administrative expenses net of ceding commissions. The following table reconciles total other insurance costs to the amount presented in the consolidated statement of operations:

Three Months Ended December 31,Year Ended December 31,
(in thousands)2023202220232022
Other insurance costs, gross206,353 238,392 823,455 868,385 
 Reinsurance ceding commissions26 (42,533)1,002 (161,946)
Other insurance costs206,379 195,859 824,457 706,439 








Oscar Health, Inc.
News Release
The Company classifies reinsurance recoverable within current assets on its consolidated balance sheets. The composition of the reinsurance recoverable balance is as follows:

As of December 31,
(in thousands)20232022
Ceded reinsurance claim recoverables$225,705 $776,266 
Reinsurance ceding commissions6,185 42,805 
Experience refunds on reinsurance agreements9,304 73,816 
Reinsurance recoverable$241,194 $892,887 


v3.24.0.1
Cover Page
Feb. 07, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 07, 2024
Entity Registrant Name Oscar Health, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40154
Entity Tax Identification Number 46-1315570
Entity Address, Address Line One 75 Varick Street, 5th Floor
Entity Address, City or Town New York
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10013
City Area Code 646
Local Phone Number 403-3677
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, $0.00001 par value per share
Trading Symbol OSCR
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001568651
Amendment Flag false
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