10q10k10q10k.net

What changed in Oscar Health, Inc.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Oscar Health, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+543 added−561 removedSource: 10-K (2024-02-15) vs 10-K (2023-02-24)

Top changes in Oscar Health, Inc.'s 2023 10-K

543 paragraphs added · 561 removed · 411 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

95 edited+24 added−40 removed81 unchanged
Biggest changeMembership by State As of December 31, 2022 2021 Florida 685,205 291,894 Texas 148,362 90,369 Georgia 103,970 6,610 California 72,194 98,532 Ohio 24,953 17,980 Connecticut 20,185 6,177 New York 19,557 27,462 Arizona 16,971 23,561 New Jersey 16,620 13,728 Missouri 6,944 1,541 Tennessee 6,939 5,158 Iowa 5,928 1,330 Oklahoma 4,956 1,425 Pennsylvania 3,691 4,376 Colorado 3,453 2,865 Kansas 3,171 2,455 Nebraska 3,145 — Illinois 2,045 — North Carolina 1,007 602 Michigan 985 1,522 Virginia 710 582 Arkansas 492 — Total 1,151,483 598,169 Seasonality Our business is generally affected by the seasonal patterns of our member enrollment and medical expenses, health plan mix shift and, to a lesser extent, marketing spend in advance of an Open Enrollment Period or Annual Election Period.
Biggest changeMembership by State As of December 31, 2023 2022 Florida 593,867 685,205 Georgia 117,189 103,970 Texas 112,554 148,362 California 50,511 72,194 Ohio 27,871 24,953 Oklahoma 20,352 4,956 Connecticut 19,660 20,185 New Jersey 18,842 16,620 Arizona 16,783 16,971 New York 14,021 19,557 Iowa 10,344 5,928 Tennessee 10,228 6,939 Missouri 7,604 6,944 Illinois 6,057 2,045 Kansas 3,808 3,171 Pennsylvania 3,193 3,691 Michigan 1,784 985 North Carolina 780 1,007 Nebraska 499 3,145 Virginia 336 710 Colorado — 3,453 Arkansas — 492 Total 1,036,283 1,151,483 Seasonality Our business is generally affected by the seasonal patterns of our member enrollment, medical expenses, and health plan mix shift.
In the effort to increasingly disrupt the healthcare industry, we bring our diverse workforce together to help inform the initiatives of our Culturally Competent Care Program, which strives to provide care to patients with diverse values, beliefs, and behaviors, including tailoring care delivery to meet patients’ social, cultural and linguistic needs.
In the effort to increasingly disrupt the healthcare industry, we bring our workforce together to help inform the initiatives of our Culturally Competent Care Program, which strives to provide care to patients with diverse values, beliefs, and behaviors, including tailoring care delivery to meet patients’ social, cultural and linguistic needs.
We rely on technology experts and a small number of highly-specialized insurance experts, and other highly skilled personnel, and competition in our industry for qualified employees is intense.
We rely on technology experts, a small number of highly-specialized insurance experts, and other highly skilled personnel, and competition in our industry for qualified employees is intense.
SALES AND MARKETING Our marketing and sales initiatives focus on member growth through four primary avenues: acquiring members through Health Insurance Marketplaces, acquiring members through brokers, acquiring members directly through our digital platform and internal sales team, and signing agreements with small businesses that provide employee coverage as part of their benefits packages.
SALES AND MARKETING Our marketing and sales initiatives focus on member growth through four primary avenues: acquiring members through brokers, acquiring members through Health Insurance Marketplaces, acquiring members directly through our digital platform and internal sales team, and signing agreements with small businesses that provide employee coverage as part of their benefits packages.
For information on risks associated with our regulatory framework, see “Risk Factors—Risks Related to the Regulatory Framework that Governs Us—Changes or developments in the health insurance markets in the United States, including passage and implementation of a 14 Table of Contents law to create a single-payer or government-run health insurance program, could materially and adversely harm our business and operating results.” Supervisory agencies, including federal and state regulatory and enforcement authorities, have broad authority to: • grant, suspend, deny, and revoke certificates of authority to transact insurance; • regulate our products and services; • regulate, limit, or suspend our ability to market products, including the exclusion of our products from Health Insurance Marketplaces; • approve premium rates; • monitor our solvency and reserve adequacy; • scrutinize our investment activities on the basis of quality, diversification, and other quantitative criteria; and • impose criminal, civil, or administrative monetary penalties, and other sanctions for non-compliance with regulatory requirements.
For information on risks associated with our regulatory framework, see “Risk Factors—Risks Related to the Regulatory Framework that Governs Us—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, could materially and adversely harm our business and operating results.” Supervisory agencies, including federal and state regulatory and enforcement authorities, have broad authority to: • grant, suspend, deny, and revoke certificates of authority to transact insurance; • regulate our products and services; • regulate, limit, or suspend our ability to market products, including the exclusion of our products from Health Insurance Marketplaces; • approve premium rates; • monitor our solvency and reserve adequacy; • scrutinize our investment activities on the basis of quality, diversification, and other quantitative criteria; and 14 Table of Contents • impose criminal, civil, or administrative monetary penalties, and other sanctions for non-compliance with regulatory requirements.
We believe that the principal competitive features affecting our ability to retain and increase membership include the range and prices of health plans offered, diversity of coverage, benefits and wellness programs, breadth and quality of provider network, quality of service and member experience, responsiveness to member demands, financial stability, comprehensiveness of coverage, market presence, and reputation.
We believe that the principal competitive features affecting our ability to retain and increase membership include the range and prices of health plans offered, breadth and quality of provider network, comprehensiveness of coverage, benefits and wellness programs, quality of service and member experience, responsiveness to member demands, market presence, financial stability, and reputation.
Our members also depend upon our information systems for enrollment, primary care and specialist physician roster access and other information, while our providers depend upon our information systems for eligibility verifications, claims status, and other information. We partner with third parties, including Amazon, Appian, Atlassian, inContact, and Google, to support our information technology systems.
Our members also depend upon our information systems for enrollment, primary care and specialist physician roster access and other information, while our providers depend upon our information systems for eligibility verifications, claims status, and other information. We partner with third parties, including Amazon, Appian, inContact, and Google, to support our information technology systems.
Our Provider Contracts and Network Our health plans include access to a network of high-quality physicians and hospitals, as well as a personalized Care Team that supports members from finding a doctor to navigating costs.
Our Provider Contracts and Network Our health plans include access to a network of high-quality physicians and hospitals, as well as a Care Team that supports members from finding a doctor to navigating costs.
See “Risk Factors—Risks Related to Our Business—We make virtual health care services available to our members through Oscar Medical Group, in which we do not own any equity or voting interest, and our virtual care availability may be disrupted if our arrangements with providers like the Oscar Medical Group become subject to legal challenges.” AVAILABLE INFORMATION Our website is www.hioscar.com.
See “Risk Factors—Risks Related to Our Business—We make virtual healthcare services available to our members through Oscar Medical Group, in which we do not own any equity or voting interest, and our virtual care availability may be disrupted if our arrangements with providers like the Oscar Medical Group become subject to legal challenges.” AVAILABLE INFORMATION Our website is www.hioscar.com.
Oscar has exclusive provider organizations (“EPO”) or similar networks in all of our markets for our Individual and Medicare Advantage products. The Cigna + Oscar Small Group products use Cigna’s network to offer preferred provider organization (“PPO”) and EPO plans. We selectively work with technology-forward, high brand-recognition health systems, including some of the largest health systems in the U.S.
Oscar has exclusive provider organizations (“EPO”) or similar networks in all of our markets for our Individual products. The Cigna+Oscar Small Group products use Cigna’s network to offer preferred provider organization (“PPO”) and EPO plans. We selectively work with technology-forward, high brand-recognition health systems, including some of the largest health systems in the U.S.
Our information systems and applications require continual maintenance, upgrading, and enhancement to meet our current and expected operational needs and regulatory requirements. We regularly upgrade and expand our information systems’ capabilities.
Our information systems and applications require continual maintenance, upgrading, and enhancement to meet our current and expected operational needs and regulatory requirements. We aim to regularly upgrade and expand our information systems’ capabilities.
As portions of the health care system increasingly shift towards offering more selective networks, we believe the insurers that will thrive are those that can consistently deliver a high-quality experience by engaging their members and routing care to in-network facilities and physicians that offer quality care at affordable rates.
As portions of the healthcare system increasingly shift towards offering more selective networks, we believe the insurers that will thrive are those that can consistently deliver a high-quality experience by engaging their members and routing care to in-network facilities and physicians that offer quality care at affordable rates.
It is the combination of all these factors—trust, engagement, care routing, and personalized insights—that allows us to help our members find quality care at rates they can afford. Our ability to deliver a high-value product, in turn, engenders more trust, engagement, and ability on our part to provide personalized, data-driven insights.
It is the combination of all these factors—trust, engagement, care routing, and personalized insights—that enables us to help members find quality care at rates they can afford. Our ability to deliver a high-value product, in turn, engenders more trust, engagement, and ability on our part to provide personalized, data-driven insights.
While our health insurance subsidiaries are required to meet various federal and state requirements regarding the size and composition of our participating provider networks, our business model is based on contracting with selected health care systems and other providers, not all systems and providers in a given area.
While our health insurance subsidiaries are required to meet various federal and state requirements regarding the size and composition of our participating provider networks, our business model is based on contracting with selected healthcare systems and other providers, not all systems and providers in a given area.
In particular, there has recently been increased scrutiny by the DOJ on health plans’ diagnosis coding and risk adjustment practices, particularly for Medicare Advantage plans. The regulations, contractual requirements, and policies applicable to participants in government health care programs are complex and subject to change.
In particular, there has recently been increased scrutiny by the DOJ on health plans’ diagnosis coding and risk adjustment practices, particularly for Medicare Advantage plans. The regulations, contractual requirements, and policies applicable to participants in government healthcare programs are complex and subject to change.
For information on risks associated with our intellectual property rights, see “Risk Factors—Risks Related to our Business—Failure to secure, protect, or enforce our intellectual property rights could harm our business, results of operations, and financial condition.” INFORMATION TECHNOLOGY Our business is dependent on effective, resilient, and secure information systems that assist us in, among other things, monitoring utilization and other cost factors, processing provider claims, providing data to our regulators, and implementing our data security measures.
For information on risks associated with our intellectual property rights, see “Risk Factors—Risks Related to our Business—Failure to secure, protect, or enforce our intellectual property rights could harm our business, results of operations, and financial condition.” 13 Table of Contents INFORMATION TECHNOLOGY Our business is dependent on effective, resilient, and secure information systems that assist us in, among other things, monitoring utilization and other cost factors, processing provider claims, providing data to our regulators, and implementing our data security measures.
We have established a program of security measures to help protect our computer systems from security breaches and malicious activity and have implemented controls designed to protect the confidentiality, integrity, and availability of data, including protected health information (“PHI”), and the systems that store and transmit such data.
We have established a program of security measures intended to protect our computer systems from security breaches and malicious activity and have implemented controls designed to protect the confidentiality, integrity, and availability of data, including protected health information (“PHI”), and the systems that store and transmit such data.
For more information on RBC capital and additional liquidity and capital requirements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Overview.” Additionally, as a company that directly or indirectly controls insurers, we have an obligation to adopt a formal enterprise risk management (“ERM”) function and file enterprise risk reports on an annual basis.
For more information on RBC capital and additional liquidity and capital requirements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Overview.” 15 Table of Contents Additionally, as a company that directly or indirectly controls insurers, we have an obligation to adopt a formal enterprise risk management (“ERM”) function and file enterprise risk reports on an annual basis.
There are laws and regulations that set specific standards for delivery of services, appeals, grievances, and payment of claims, adequacy of health care professional networks, fraud prevention, protection of consumer health information, pricing and underwriting practices, and covered benefits and services.
There are laws and regulations that set specific standards for delivery of services, appeals, grievances, and payment of claims, adequacy of healthcare professional networks, fraud prevention, protection of consumer health information, pricing and underwriting practices, and covered benefits and services.
Qui tam actions have increased significantly in recent years, causing greater numbers of health care companies to have to defend a false claim action, pay substantial settlement amounts, and/or enter into a CIA and/or other heightened monitoring arrangements to avoid exclusion from government health care programs as a result of an investigation arising out of such action.
Qui tam actions have increased significantly in recent years, causing greater numbers of healthcare companies to have to defend a false claim action, pay substantial settlement amounts, and/or enter into a CIA and/or other heightened monitoring arrangements to avoid exclusion from government healthcare programs as a result of an investigation arising out of such action.
Fraud, waste, and abuse prohibitions encompass a wide range of activities, including, but not limited to, kickbacks or other inducements for referral of members or for the coverage of products (such as prescription drugs) by a plan, billing for unnecessary medical services by a health care provider, payments made to excluded providers, and improper marketing and beneficiary inducements.
Fraud, waste, and abuse prohibitions encompass a wide range of activities, including, but not limited to, kickbacks or other inducements for referral of members or for the coverage of products (such as prescription drugs) by a plan, billing for unnecessary medical services by a healthcare provider, payments made to excluded providers, and improper marketing and beneficiary inducements.
Except as specifically indicated otherwise, the information found or available by hyperlink on our website or any other outlets we identify from time to time is not and shall not be deemed to be part of this or any other report we file with, or furnish to, the SEC.
Except as specifically indicated otherwise, the information found or available by hyperlink on our website or any other outlets we identify from time to time is not and shall not be deemed to be part of this or any other report we file with, or furnish to, the SEC. 20 Table of Contents
Some of our business activity is subject to other health care-related regulations and requirements, including utilization review, pharmacy service, or provider-related regulations and regulatory approval requirements. These requirements differ from state to state and may contain network, contracting, product and rate, licensing and financial and reporting requirements.
Some of our business activity is subject to other healthcare-related regulations and requirements, including utilization review, pharmacy service, or provider-related regulations and regulatory approval requirements. These requirements differ from state to state and may contain network, contracting, product and rate, licensing and financial and reporting requirements.
In March 2017, the New York Department of Financial Services (“NYDFS”) promulgated Cybersecurity Requirements for Financial Services Companies, which require covered financial institutions to establish and maintain a cybersecurity program and implement and maintain cybersecurity policies and procedures that meet specific requirements.
In March 2017, the New York Department of Financial Services (“NYDFS”) promulgated Cybersecurity Requirements for Financial Services Companies, which were amended in 2023 and require covered financial institutions to establish, implement and maintain a cybersecurity program and cybersecurity policies and procedures that meet specific requirements.
These requirements include uniform standards of common electronic health care transactions and privacy and security regulations, and unique identifier rules for employers, health plans, and providers.
These requirements include uniform standards of common electronic healthcare transactions and privacy and security regulations, and unique identifier rules for employers, health plans, and providers.
Dispositions of control generally are also regulated under applicable state insurance holding company laws. 15 Table of Contents The states of domicile of our health insurance subsidiaries have statutory risk-based capital ("RBC") requirements for insurance companies and HMOs.
Dispositions of control generally are also regulated under applicable state insurance holding company laws. The states of domicile of our health insurance subsidiaries have statutory risk-based capital ("RBC") requirements for insurance companies and HMOs.
We compete to hire and retain highly talented and diverse individuals, and we offer our employees compensation packages designed to be competitive, including a base salary and some of the following, depending on the role and business function: performance bonus, long-term incentive equity, performance-based equity, commission, and overtime pay.
We compete to hire and retain highly talented individuals from all backgrounds, and we offer our employees compensation packages designed to be competitive, including a base salary and some of the following, depending on the role and business function: performance bonus, long-term incentive equity, performance-based equity, commission, and overtime pay.
Violations of these laws can also result in exclusion, debarment, temporary or permanent suspension from participation in government health care programs, the institution of corporate integrity agreements (“CIAs”), and/or other heightened monitoring of our operations.
Violations of these laws can also result in exclusion, debarment, temporary or permanent suspension from participation in government healthcare programs, the institution of corporate integrity agreements (“CIAs”), and/or other heightened monitoring of our operations.
For instance, the fee structures for these contracts vary, and can include fee-for-service arrangements, value-based incentives and payment structures, or payments on a capitation basis. Membership Markets Oscar's member-first philosophy and innovative approach to care has earned us the trust of over one million members across our Individual, Small Group and Medicare Advantage plans.
For instance, the fee structures for these contracts vary, and can include fee-for-service arrangements, value-based incentives and payment structures, or payments on a capitation basis. Membership Markets Oscar's member-first philosophy and innovative approach to care earned us the trust of over one million members across our Individual, Small Group and Medicare Advantage plans as of December 31, 2023.
States also may choose to enact more restrictive rules than the federal minimum standards. 17 Table of Contents • Medicare Advantage reimbursement rates will not increase as much as they would have absent the ACA, due to the payment formula promulgated by the ACA that continues to impact reimbursements.
States also may choose to enact more restrictive rules than the federal minimum standards. • Medicare Advantage reimbursement rates will not increase as much as they would have absent the ACA, due to the payment formula promulgated by the ACA that continues to impact reimbursements.
Owning the technologies that power our business from end-to-end lets us pioneer new ways of addressing frictions in the health care system and is the foundation for Oscar’s vision to make a healthier life accessible and affordable for all. Today, this platform provides the foundation for our personalized data insight and analysis as well as our critical cost structure savings.
Owning the technologies that power our business from end-to-end lets us pioneer new ways of addressing frictions in the healthcare system and is the foundation for Oscar’s mission to make a healthier life accessible and affordable for all. Today, this platform provides the foundation for our personalized data insight and analysis as well as our critical cost structure savings.
Powered by our own differentiated full stack technology platform, we have built a scaled insurance business that enables us to earn our members’ trust, leverage the power of personalized data, and help our members find quality care they can afford.
Powered by our own differentiated cloud-native technology platform, we have built a scaled insurance business that enables us to earn our members’ trust, leverage the power of personalized data, and help our members find quality care they can afford.
Item 1. Business OUR BUSINESS At Oscar, we make a healthier life accessible and affordable for all. Oscar is the first health insurance company built around a full stack technology platform and a relentless focus on serving our members.
Item 1. Business OUR BUSINESS At Oscar, we make a healthier life accessible and affordable for all. Oscar is the first health insurance company built around a full stack technology platform and a relentless focus on member experience.
While the changes to the RADV program are in part intended to provide health insurers with greater stability and predictability, and promote fairness in the RADV program’s administration, such changes may ultimately increase the government’s ability to retrospectively claw back or recover funds from health insurers.
While the changes to the Risk Adjustment Data Valuation (“RADV”) program are in part intended to provide health insurers with greater stability and predictability, and promote fairness in the RADV program’s administration, such changes may ultimately increase the government’s ability to retrospectively claw back or recover funds from health insurers.
Federal consumer protection laws may also apply in some instances to our privacy and security practices related to personally identifiable information. We maintain an internal HIPAA compliance program, which we believe complies with HIPAA privacy and security regulations, and have dedicated resources to monitor compliance with this program.
Federal consumer protection laws may also apply in some instances to our privacy and security practices related to personally identifiable information. We maintain an internal HIPAA compliance program, which is designed to comply with HIPAA privacy and security regulations, and have dedicated resources to monitor compliance with this program.
Trust, engagement, and personalized data allow us to help route our members to the providers that can give them timely care they need at an optimized cost, including virtual care. Our full stack technology platform also permits us to offer personalized insights and benefits.
Trust, engagement, and personalized data allow us to help route members to providers who can give them timely care they need at an optimized cost, including virtual care. Our technology platform also permits us to offer personalized insights and benefits.
Under the American Rescue Plan, starting April 1, 2021, APTC subsidies were available for the 2021 and 2022 plan years for most individuals and families making more than 400% of the federal poverty level ("FPL"), and APTC subsidies were temporarily increased for all income brackets.
Under the American Rescue Plan, starting April 1, 2021, APTC subsidies were available for the 2021 and 2022 plan years for most individuals and families making between 100% and 400% of the federal poverty level ("FPL"), and APTC subsidies were temporarily increased for all applicable income brackets.
Claims Incurred Our medical expenses are impacted by seasonal effects of medical costs such as the utilization of deductibles and out-of-pocket maximums over the course of the policy year, which shifts more costs to us in the second half of the year as we pay a higher proportion of claims.
Claims Incurred Our medical expenses are impacted by seasonal effects of medical costs such as the utilization of deductibles and out-of-pocket maximums over the course of the policy year, which shifts more costs to us in the second half of the year as we pay a higher proportion of covered claims costs, and the number of days and holidays in a given period.
When our members adopt these tools, we not only streamline their day-to-day interactions with the health care system and improve member satisfaction, we also obtain valuable data that lets us better understand their unique health care needs.
When our members adopt these tools, we not only streamline their day-to-day interactions with the healthcare system and improve member satisfaction, we also obtain valuable data that enables us to better understand their unique healthcare needs.
In addition, there are numerous proposed health care laws and regulations at the federal, state, and local levels.
In addition, there are numerous proposed healthcare laws and regulations at the federal, state, and local levels.
We believe every American deserves access to affordable, high-quality health care that fits their life – from families seeking coverage that works for toddlers and their busy parents, to adults with chronic conditions who know their care providers by their first names – and everyone in between.
We believe every American deserves access to affordable, high-quality healthcare that fits their life – from families seeking coverage that works for toddlers and their busy parents, to adults with chronic conditions who know their care providers by their first names, to small businesses choosing a benefits package – and everyone in between.
However, our software and other proprietary information are protected by copyright on creation. Copyright registrations, which have so far not been necessary, may be sought on an as-needed basis. We seek to control access to and distribution of our proprietary information, including our algorithms, source and object code, designs, and business processes, through security measures and contractual restrictions.
Copyright registrations, which have so far not been necessary, may be sought on an as-needed basis. We seek to control access to and distribution of our proprietary information, including our algorithms, source and object code, designs, and business processes, through security measures and contractual arrangements.
In the Small Group market, for example, our principal competitors include plans offered by national carriers and local Blue Cross plans, while our principal competitors in the Individual market primarily consist of plans offered by national carriers, regional carriers, Medicaid-focused insurers offering Health Insurance Marketplace products, local Blue Cross plans, and start-up carriers.
In the small group market, for example, our principal competitors include plans offered by national carriers and local Blue Cross plans, while our principal competitors in the individual market primarily consist of plans offered by national carriers, regional carriers, Medicaid-focused insurers offering Health Insurance Marketplace products, and local Blue Cross plans. Additionally, we face significant competition for personnel.
Our use of cloud service providers in particular is intentionally and inherently resilient, with platform level redundancy in networking and computer hardware. As an example, we distribute our Amazon Web Services services across multiple availability zones to reduce the likelihood of infrastructure failure.
Our use of cloud service providers in particular is strategic, due to platform level redundancy in networking and computer hardware. As an example, we distribute our Amazon Web Services-hosted platform across multiple availability zones in an effort to reduce the likelihood of infrastructure failure.
These laws typically require increasing degrees of regulatory oversight and intervention if a company’s RBC declines below certain thresholds. As of December 31, 2022, the RBC levels of our insurance and HMO subsidiaries met or exceeded all applicable mandatory RBC requirements.
These laws typically require increasing degrees of regulatory oversight and intervention if a company’s RBC declines below certain thresholds. As of December 31, 2023, the RBC levels of our insurance and HMO subsidiaries expect to meet or exceed all applicable mandatory RBC requirements.
Ongoing Requirements and Changes Stemming from the ACA The ACA significantly changed the United States healthcare system.
Ongoing Requirements and Changes to the ACA The ACA significantly changed the United States healthcare system.
See “Risk Factors—Risks Related to the Regulatory Framework that Governs Us—We are subject to extensive fraud, waste, and abuse laws that may require us to take remedial measures or give rise to lawsuits and claims against us, the outcome of which may have a material adverse effect on our business, financial condition, cash flows, or results of operations.” 19 Table of Contents Further, analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, may be broader in scope than their federal equivalents; state insurance laws require insurance companies to comply with state regulations.
See “Risk Factors—Risks Related to the Regulatory Framework that Governs Us—We are subject to extensive fraud, waste, and abuse laws that may require us to take remedial measures or give rise to lawsuits and claims against us, the outcome of which may have a material adverse effect on our business, financial condition, cash flows, or results of operations.” Further, analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, may be broader in scope than their federal equivalents; state insurance laws require insurance companies to comply with state regulations. 19 Table of Contents Guaranty Fund Assessments Under certain state insolvency or guaranty association laws, insurance companies and HMOs can be assessed for amounts paid by guaranty funds for policyholder losses incurred when an insurance company or HMO becomes insolvent.
Individual plan membership is historically at its highest at the beginning of the year. For Small Group products, a large portion of membership is acquired between December 1 and January 1, with the remaining members acquired throughout the balance of the year.
For small group products, a large portion of membership is acquired between December 1 and January 1, with the remaining members acquired throughout the balance of the year.
That experience begins with trust and engagement, which we earn by providing our members with features that help them navigate the many disconnected elements of the health care ecosystem.
The Oscar member experience begins with trust and engagement, which we earn by providing our members with features to help them navigate the many disconnected elements of the healthcare ecosystem.
This allows us to work more closely with high quality health care systems that engage with us using our technology and to receive more favorable reimbursement rates from these health care systems.
This 12 Table of Contents allows us to work more closely with high quality healthcare systems that engage with us using our technology and to receive more favorable reimbursement rates from these healthcare systems.
There are also numerous state and federal laws and regulations related to the privacy and security of health information. Laws in all 50 states require businesses to provide notices to affected individuals whose personal information has been disclosed as a result of a data breach, and certain states require notifications for data breaches involving individually identifiable health information.
Laws in all 50 states require businesses to provide notices to affected individuals whose personal information has been disclosed as a result of a data breach, and certain states require notifications for data breaches involving individually identifiable health information.
Failure to meet the minimum MLR thresholds triggers an obligation to issue premium rebates to members. • The ACA also imposed a separate minimum MLR threshold of 85% for Medicare Advantage plans. Medicare Advantage plans that do not meet this threshold will have to pay a member MLR rebate.
Failure to meet the minimum MLR thresholds triggers an obligation to issue premium rebates to members. • The ACA also imposed a separate minimum MLR threshold of 85% for Medicare Advantage plans.
We also expect further and ongoing regulatory guidance on a number of issues related to Medicare Advantage, including evolving methodologies for ratings and quality bonus payments.
We may also expect further and ongoing regulatory guidance on a number of issues related to our historical Medicare Advantage plans offered in 2023 and prior years, including evolving methodologies for ratings and quality bonus payments.
For information on risks associated with our information technology systems, see “Risk Factors—Risks Related to our Business—If we are unable to integrate and manage our information systems effectively, our operations could be disrupted” and “Risk Factors—Risks Related to our Business—If we or our partners or other third parties with whom we collaborate sustain a cyber-attack or suffer privacy or data security breaches that disrupt our information systems or operations, or result in the dissemination of sensitive personal or confidential information, we could suffer increased costs, exposure to significant liability, adverse regulatory consequences, reputational harm, loss of business, and other serious negative consequences.” GOVERNMENT REGULATION General Our operations are subject to comprehensive and detailed federal, state, and local laws and regulations throughout the jurisdictions in which we do business.
For information on risks associated with our information technology systems, see “Risk Factors—Risks Related to our Business—If we are unable to integrate and manage our information systems effectively, our operations could be disrupted” and “Risk Factors—Risks Related to our Business—If we or our partners or other third parties with whom we collaborate fail to protect confidential information and/or sustain a data security incident, we could suffer increased costs, material financial penalties, exposure to significant liability, adverse regulatory consequences, and reputational harm, which would materially adversely affect our business, results of operations, and financial condition.” GOVERNMENT REGULATION General Our operations are subject to comprehensive and detailed federal, state, and local laws and regulations throughout the jurisdictions in which we do business.
Assumed premiums for the year ended December 31, 2022 were $138.1 million. 8 Table of Contents Disaggregated membership information as of December 31, 2022 and 2021 is presented in the tables below: Membership by Offering As of December 31, 2022 2021 Individual and Small Group 1,084,404 577,799 Medicare Advantage 4,452 3,864 Cigna + Oscar (1) 62,627 16,506 Total 1,151,483 598,169 (1) Represents total membership for our co-branded partnership with Cigna.
Assumed premiums for the year ended December 31, 2023 were $228.8 million . 8 Table of Contents Disaggregated membership information as of December 31, 2023 and 2022 is presented in the tables below: Membership by Offering As of December 31, 2023 2022 Individual and Small Group 967,002 1,084,404 Medicare Advantage 1,781 4,452 Cigna+Oscar (1) 67,500 62,627 Total 1,036,283 1,151,483 (1) Represents total membership for our co-branded partnership with Cigna.
In substantially all cases, our base premiums are subject to a risk adjustment based on the health status of our members relative to the overall health status of all individuals in a given state or market.
In substantially all cases, our base premiums are subject to a risk adjustment based on the health status of our members relative to the overall health status of all individuals in a given state or market. Medicare Advantage We no longer offer Medicare Advantage plans, effective with plan year 2024.
In 2023, Oscar plans to release its inaugural ESG Report, which will be made available through the “Investor Relations” section of Oscar’s website (ir.hioscar.com). Neither the ESG Report nor the contents of our website are incorporated by reference herein.
In 2023, Oscar released its inaugural environmental, social and governance (“ESG”) Report, which is available through the “Investor Relations” section of Oscar’s website (ir.hioscar.com). Neither the ESG Report nor the contents of our website are incorporated by reference herein.
These patterns can be affected by legislative or regulatory actions, Special Enrollment Periods or other market dynamics that allow the overall market to grow throughout the year.
These patterns can be affected by market dynamics during the various Enrollment Periods such as Medicaid redeterminations, other legislative or regulatory actions, or other factors that enable the overall market to grow throughout the year.
Regulation of Medicare Advantage Plans We are also subject to comprehensive oversight from CMS related to our Medicare Advantage plans. CMS regulates the Medicare Advantage payments made to us and the submission of information relating to the health status of members for purposes of determining the amounts of those payments.
CMS regulates the Medicare Advantage payments made to us and the submission of information relating to the health status of members for purposes of determining the amounts of those payments.
Direct policy premiums earned are historically highest in the first quarter, primarily due to the annual enrollment cycles and the enrollment of our members, but may be impacted by Special Enrollment Periods or other market dynamics that allow the overall market to grow throughout the year.
Direct policy premiums earned are historically highest in the first quarter, primarily due to the annual enrollment cycles, but may be impacted by Special Enrollment Periods or other market dynamics that enable the overall market to grow throughout the year. Medical expenses are sensitive to the mix shift of the five metal health plan categories offered on the ACA.
As of December 31, 2022, we had no issued patents and no pending patent applications anywhere in the world, and therefore, we do not have patent protection for any of our proprietary technology, including our full stack technology platform, proprietary software, 13 Table of Contents mobile app, or web portal.
As of December 31, 2023, we owned no issued patents or pending patent applications anywhere in the world, and therefore, we do not have patent protection for any of our proprietary technology, which includes our full stack technology platform, proprietary software, mobile app, or web portal. However, our software and other proprietary information are protected by copyright on creation.
HUMAN CAPITAL RESOURCES As of December 31, 2022, we had 2,714 full-time employees. As the first health insurance company built around a full stack technology platform and a relentless focus on serving our members, we are powered by people from a diversity of backgrounds, experiences, and industries.
As the first health insurance company built around a full stack technology platform and a relentless focus on member experience, we are powered by people from a diversity of backgrounds, experiences, and industries.
In quota share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company’s losses arising out of a defined class of business in exchange for a corresponding percentage of premiums, net of a ceding commission.
Our reinsurance is contracted under two different types of arrangements: quota share reinsurance contracts and excess of loss (“XOL”) reinsurance contracts. In quota share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company’s losses arising out of a defined class of business in exchange for a corresponding percentage of premiums.
Additionally, various federal and state laws have minimum Medical Loss Ratio ("MLR") requirements. We elect to participate in a given Individual or Small Group market on an annual basis.
Individual and small group premium rates, along with specific rate changes, are required to be approved by applicable state and federal regulatory agencies in accordance with the ACA. Additionally, various federal and state laws have minimum Medical Loss Ratio ("MLR") requirements. We elect to participate in a given individual or small group market on an annual basis.
The significant majority of our membership is acquired through the broker channel. The proportion of broker-acquired business increased year over year consistent with the macro trend in the Health Insurance Marketplace, where we see fewer members signing up directly on the exchanges.
The proportion of broker-acquired business increased year over year consistent with the macro trend in the Health Insurance Marketplace, where we see fewer members signing up directly on the exchanges. Our digital engagement platform, a key element of our retention strategy, is used by brokers and consumers.
The enhanced APTC subsidies were intended to lapse at the end of 2022 but were extended through plan year 2025 by the Inflation Reduction Act of 2022 .
The enhanced APTC subsidies were intended to lapse at the end of 2022 but were extended through plan year 2025 by the Inflation Reduction Act of 2022 . The American Rescue Plan also provides for enhanced flexibility for states to extend Medicaid eligibility to women for 12 months postpartum.
We see our compensation philosophy as grounded in a transparent, systemic, and equitable approach to employee compensation that is rooted in data and company performance, and benchmarked against technology, healthcare, and insurance peers. To continue to address turnover throughout external economic swings, we have also offered financial, and non-financial, incentives to try to retain our high performing employees.
We see our compensation philosophy as grounded in a transparent, systemic, and equitable approach to employee compensation that is rooted in data and company performance, and benchmarked against technology, healthcare, and insurance peers.
Department of Health and Human Services (“HHS”), are as follows: ◦ Small Group: 80% ◦ Individual: 80% • Certain states require us to meet more restrictive MLR thresholds.
Some of the more significant ACA rules are described below: • The minimum MLR thresholds by market, as defined by U.S. Department of Health and Human Services (“HHS”), are as follows: ◦ Small Group: 80% ◦ Individual: 80% 16 Table of Contents • Certain states require us to meet more restrictive MLR thresholds.
Under XOL reinsurance, the premium payable to the reinsurer is negotiated by the parties based on losses on an individual member in a given calendar year and their assessment of the amount of risk being ceded to the reinsurer because the reinsurer does not share proportionately in the ceding company’s losses.
Under XOL reinsurance, the premium payable to the reinsurer is negotiated by the parties based on losses on an individual member in a given calendar year and their assessment of the amount of risk being ceded to the reinsurer. OUR DIFFERENTIATED TECHNOLOGY PLATFORM Since inception, Oscar has been focused on building our technological infrastructure and end-to-end experience.
Health and Wellbeing At Oscar we believe that making a healthier life affordable and accessible to all begins with our own workforce, and we continually seek opportunities to optimize our employee offerings including events, activities, benefits, perks and community support.
As a result of our shift to a flexible workforce and expanding our recruiting efforts beyond states where we maintain a physical office location, we have had the opportunity to further expand the geographic diversity of our workforce in 2023. 11 Table of Contents Health and Wellbeing At Oscar, we believe that making a healthier life affordable and accessible to all begins with our own workforce, and we continually seek opportunities to optimize our employee offerings including events, activities, benefits, perks and community support.
Medicare Advantage We have a limited Medicare Advantage business where we offer coverage to adults who are age 65 and older and eligible for traditional Medicare, but who instead select coverage through a private market plan.
We had a limited Medicare Advantage business where we offered coverage to adults age 65 and older and eligible for traditional Medicare, but who instead selected coverage through a private market plan. We had a contract with the Centers for Medicare & Medicaid Services ("CMS") under the Medicare Advantage program to provide healthcare benefits to Medicare beneficiaries.
Never build alone. 11 Table of Contents Talent Recruitment and Retention As a mission-driven company, we prioritize attracting and retaining qualified personnel who share our mission to make a healthier life affordable and accessible to all.
Give and ask for direct feedback. Be grateful for and excited by the help of others. 7. Make it right. Admit your mistakes. Then learn from them. Never build alone. Talent Recruitment and Retention As a mission-driven company, we prioritize attracting and retaining qualified personnel who share our mission to make a healthier life affordable and accessible to all.
Product features such as Care Teams, care routing, and virtual care are our way of building the trust, engagement, and relationships that give us the ability to help members bend the cost curve in health care.
We refer to this virtuous cycle as our member engagement engine. Product features such as care routing, virtual care, and our Care Teams are how we build the trust, engagement, and relationships needed to help members bend the cost curve in healthcare.
As a result, engagement with our technology platform and customer satisfaction remains high, relative to industry average. We believe competitors who lack this member engagement engine will face significant challenges in replicating our consumer experience, and our platform thus forms an important structural moat around the innovations we have developed.
During the fourth quarter of 2023, our net promoter score reached 60, which is meaningfully higher than the industry average. 10 Table of Contents We believe competitors who lack this member engagement engine will face significant challenges in replicating our consumer experience, and our platform thus forms an important structural moat around the innovations we have developed.
The American Rescue Plan also provides for enhanced flexibility for states to extend Medicaid eligibility to women for 12 months postpartum. 16 Table of Contents Further, implementation of the ACA brings with it significant oversight responsibilities by health insurers that may result in increased governmental audits, increased assertions of alleged False Claims Act (“FCA”) liability, and an increased risk of other litigation.
Further, implementation of the ACA brings with it significant oversight responsibilities by health insurers that may result in increased governmental audits, increased assertions of alleged False Claims Act (“FCA”) liability, and an increased risk of other litigation. Federal regulatory agencies continue to modify regulations and guidance related to the ACA and markets more broadly.
Diversity, Equity, and Inclusion We recognize the importance of diversity, equity, and inclusion in the workplace, and we aim to embed these efforts across our full slate of human capital programming and operations. We believe that having an increasingly diverse employee base will empower our community, drive better business outcomes, and ultimately allow us to better serve our members.
Diversity, Equity, and Inclusion We recognize the importance of diversity, equity, and inclusion in the workplace, and we aim to embed efforts to foster an inclusive workplace across our full slate of human capital programming and operations.
Over time, we’ve been observing the overall healthcare system move towards these trends, which not only validates our strategy, but provides us with a first mover advantage. We are now a scaled health insurer with over one million members, high member engagement, and our own technology stack that we have built from end to end.
We are now a scaled health insurer with over one million members, superior member experience, high member engagement, and our own technology stack that we have built from end to end.
We offer coverage in 577 counties and 20 states. We regularly evaluate our markets for strategic fit and periodically enter or exit markets. Concentration We generate a substantial majority of our total revenue from direct and assumed policy premiums. Direct policy premiums are collected directly from members and from CMS as part of the APTC program.
Concentration We generate a substantial majority of our total revenue from direct and assumed policy premiums. Direct policy premiums are collected directly from members and from CMS as part of the APTC program. For the year ended December 31, 2023, $0.9 billion and $5.5 billion of direct policy premiums were collected directly from our members and from CMS, respectively.
Our medical costs can also vary according to the number of days and holidays in a given period, the risk profile of our membership, and the proportion of our membership that is new in the calendar year.
Our medical and pharmacy costs can also exhibit seasonality depending on selection effects or changes in the risk profile of our membership and the proportion of our membership that is new in the calendar year.
We also use the data generated in member support interactions to constantly refine and improve our marketing campaign. INTELLECTUAL PROPERTY We believe that our intellectual property rights are important to our business, and our commercial success depends, in part, on our ability to protect our core technologies and other intellectual property assets.
INTELLECTUAL PROPERTY We believe that our intellectual property rights are important to our business, and our commercial success depends, in part, on our ability to protect our core technologies and other intellectual property assets. We primarily rely on copyright, trademark, and trade secret laws, confidentiality procedures, and contractual arrangements to establish and protect our intellectual property.

… 79 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

203 edited+75 added−77 removed237 unchanged
Biggest changeNumerous factors impact our ability to accurately estimate and control our medical expenses, many of which are not within our control, including, but not limited to: • changes in health care regulations and practices, including subregulatory guidance, regulations, or statutes that govern individual, small group, or Medicare Advantage plans, or the Health Insurance Marketplaces; • changes in medical utilization rates, including as a result of COVID-19; • increases in the costs of healthcare facilities and services, medical devices and pharmaceuticals, including as a result of macroeconomic inflationary effects; • changes in our member mix, the geographic concentration of our members, and the distribution of members among our plans; • general expansion of the individual health insurance market; • lack of credible data in new markets or with respect to new plan offerings; • initiation of new Special Enrollment Periods or other unexpected healthcare market developments; • the end of the temporary suspension of eligibility recertification for Medicaid recipients in response to the COVID-19 pandemic, which will likely result in an increase in healthcare exchange participation; • the broader competitive landscape, including new membership resulting from other health insurers exiting our markets; • the occurrence of natural disasters, terrorism, major epidemics, pandemics (including related to COVID-19 and its variants), and the potential effects of climate change; • continued inequity and racial discrimination in the U.S. health care system, and the resulting physical and mental health costs in broader society; • the introduction and adoption of new or costly medical technologies and pharmaceuticals; and • provider fraud.
Biggest changeNumerous factors impact our ability to accurately estimate and control our medical expenses, many of which are not within our control, including, but not limited to: • changes in healthcare regulations and practices, including subregulatory guidance, regulations, or statutes that govern individual or small group plans, or the Health Insurance Marketplaces; • changes in the utilization of prescription drugs, medical services or other covered items or services; • increases in the costs of healthcare facilities and services, medical devices and pharmaceuticals, including as a result of macroeconomic inflationary effects; • changes in our member demographic mix, the geographic concentration of our members, and the distribution of members among our plans; • changes or reductions of our utilization management functions such as preauthorization of services, concurrent review or requirements for physician referrals; • changes in our purchase discounts or pharmacy volume rebates received from drug manufacturers and wholesalers, which are generally passed on to clients in the form of additional price discounts; • increased incidences or acuity of high dollar claims related to catastrophic illnesses or medical conditions, including claims for which we may not have adequate reinsurance coverage; • general expansion of the individual health insurance market; • lack of credible data in new regions or with respect to new plan offerings; • initiation of new Special Enrollment Periods or other unexpected healthcare market developments; • the impact of Medicaid redeterminations following the expiration of the federal requirement of continuous coverage during the COVID-19 pandemic, which will likely result in an increase in healthcare exchange participation; 23 Table of Contents • the broader competitive landscape, including new membership resulting from other health insurers exiting our markets; • the occurrence of natural disasters, terrorism, public health emergencies, major epidemics, pandemics (including related to COVID-19 and its variants), and the potential effects of climate change; • continued inequity and racial discrimination in the U.S. healthcare system, and the resulting physical and mental health costs in broader society; • the introduction and adoption of new or costly medical technologies and pharmaceuticals; and • provider and broker fraud.
During such time, the extent of any harm or how best to remediate it might not be known, which could further increase the risks, costs, and consequences of a data security incident. In addition, our systems must be routinely updated, patched, and upgraded to protect against known vulnerabilities.
During such time, the extent of any harm or how best to remediate it might not be known, which could further increase the risks, costs, and consequences of a data security incident. In addition, our IT Systems must be routinely updated, patched, and upgraded to protect against known vulnerabilities.
Additionally, ineffective internal control over financial reporting could expose us to an increased risk of financial reporting fraud and the misappropriation of assets and subject us to potential delisting from the NYSE or to other regulatory investigations and civil or criminal sanctions.
Additionally, ineffective internal control over financial reporting could expose us to an increased risk of financial reporting fraud and misappropriation of assets and subject us to potential delisting from the NYSE or to other regulatory investigations and civil or criminal sanctions.
We may be unable, without significant cost or at all, to prevent third parties from diverting traffic from or acquiring domain names that are similar to, infringe upon, or otherwise decrease the value of our trademarks and other proprietary rights.
We may be unable, without significant cost or at all, to prevent third parties from diverting traffic from our domain names or acquiring domain names that are similar to, infringe upon, or otherwise decrease the value of our trademarks and other proprietary rights.
Unfavorable ratings of our company or our industry, as well as omission of inclusion of our stock into ESG-oriented investment funds, may lead to negative investor sentiment and the diversion of investment to other companies or industries, which could have a negative impact on our stock price and our access to and cost of capital.
Unfavorable ratings of the Company or our industry, as well as omission of inclusion of our stock into ESG-oriented investment funds, may lead to negative investor sentiment and the diversion of investment to other companies or industries, which could have a negative impact on our stock price and our access to and cost of capital.
Among others, our Amended Charter and Amended Bylaws include the following provisions: • a dual class structure that provides our holders of Class B common stock with the ability to control the outcome of matters requiring stockholder approval; • limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes; • advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • a prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders; • a forum selection clause, which means certain litigation can only be brought in Delaware; • no authorization of cumulative voting, which limits the ability of minority stockholders to elect director candidates; • certain amendments to our certificate of incorporation will require the approval of two-thirds of the then outstanding voting power of our capital stock, voting as a single class; • amendments to our bylaws by our stockholders will require the approval of two-thirds of the then outstanding voting power of our capital stock, voting as a single class; • the authorization of undesignated or “blank check” preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders and which may be used to create a “poison pill”; • newly created directorships are filled by a majority of directors then in office; and 48 Table of Contents • the approval of two-thirds of the then outstanding voting power of our capital stock, voting as a single class, is required to remove a director.
Among others, our Amended Charter and Amended Bylaws include the following provisions: • a dual class structure that provides our holders of Class B common stock with the ability to control the outcome of matters requiring stockholder approval; • limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes; • advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • a prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders; • a forum selection clause, which means certain litigation can only be brought in Delaware; • no authorization of cumulative voting, which limits the ability of minority stockholders to elect director candidates; • certain amendments to our certificate of incorporation will require the approval of two-thirds of the then outstanding voting power of our capital stock, voting as a single class; • amendments to our bylaws by our stockholders will require the approval of two-thirds of the then outstanding voting power of our capital stock, voting as a single class; 48 Table of Contents • the authorization of undesignated or “blank check” preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders and which may be used to create a “poison pill”; • newly created directorships are filled by a majority of directors then in office; and • the approval of two-thirds of the then outstanding voting power of our capital stock, voting as a single class, is required to remove a director.
We also rely on a small number of highly-specialized insurance experts, the loss of any one of whom could also have a disproportionate impact on our business. We face significant competition for personnel across all areas of our business, and we may not be able to replace key personnel in a timely manner or at all.
We also rely on a number of highly-specialized insurance experts, the loss of any one of whom could also have a disproportionate impact on our business. We face significant competition for personnel across all areas of our business, and we may not be able to replace key personnel in a timely manner or at all.
In addition, we may be required to license additional technology from third parties to develop and market new offerings or platform features, which may not be on commercially reasonable terms, or at all, and could adversely affect our ability to compete or require us to rebrand or otherwise modify our offerings, which could further exhaust our resources.
In addition, we may be required to license additional technology from third parties to develop and market new offerings or platform features, which may not be available on commercially reasonable terms, or at all, and could adversely affect our ability to compete or require us to rebrand or otherwise modify our offerings, which could further exhaust our resources.
Due to our limited operating history and the rapid growth we have experienced since we began operations, there is greater uncertainty in estimating our operating results, and our historical results may not be indicative of, or comparable to, our future results. In addition, we have limited data to validate key aspects of our business model, including our growth strategy.
Due to this limited operating history and the rapid growth we have experienced since we began operations, there is greater uncertainty in estimating our operating results, and our historical results may not be indicative of, or comparable to, our future results. In addition, we have limited data to validate key aspects of our business model, including our growth strategy.
As of December 31, 2022, we had outstanding indebtedness due to our issuance in February 2022 of $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement. We may incur additional indebtedness in the future, including borrowings under the Revolving Credit Facility.
As of December 31, 2023, we had outstanding indebtedness due to our issuance in February 2022 of $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement. We may incur additional indebtedness in the future, including borrowings under the Revolving Credit Facility.
Because Thrive Capital’s and our Co-Founders’ interests may differ from those of our other stockholders, actions that Thrive Capital and our Co-Founders take with respect to us, as significant stockholders, may not be favorable to our other stockholders, including holders of our Class A common stock. Thrive Capital and its affiliates engage in a broad spectrum of activities.
Because Thrive Capital and our Co-Founders’ interests may differ from those of our other stockholders, actions that Thrive Capital and our Co-Founders take with respect to us, as significant stockholders, may not be favorable to our other stockholders, including holders of our Class A common stock. Thrive Capital and its affiliates engage in a broad spectrum of activities.
Based on a recent final rule issued by CMS in January 2023, although 2011 to 2017 plan years are still subject to audit, overpayments to MA plans that are identified as a result of RADV audit will only be subject to extrapolation for plan year 2018 and any subsequent plan year.
Based on a final rule issued by CMS in January 2023, although 2011 to 2017 plan years are still subject to audit, overpayments to MA plans that are identified as a result of RADV audit will only be subject to extrapolation for plan year 2018 and any subsequent plan year.
For example, on May 12, 2022, a securities class action lawsuit against the Company, certain of its directors and officers, and the underwriters that participated in the Company’s initial public offering was commenced in the United States District Court for the Southern District of New York, captioned Carpenter v.
For example, on May 12, 2022, a securities class action lawsuit against the Company, certain of its directors and officers, and the underwriters that participated in the Company’s initial public offering ("IPO") was commenced in the United States District Court for the Southern District of New York, captioned Carpenter v.
If a provider agreement were terminated, such termination could adversely impact the adequacy of our network to service our members, and may put us at risk of non-compliance with applicable federal and state laws.
If a provider agreement were terminated, such termination could adversely impact the breadth of our network to service our members, and may put us at risk of non-compliance with applicable federal and state network adequacy laws.
We are also subject to other laws, regulations and industry standards that govern our business practices, including the Telephone Consumer Protection Act (“TCPA”), which restricts the use of automated tools and technologies to communicate with wireless telephone subscribers or communications services consumers generally, the CAN-SPAM Act, which regulates the transmission of marketing emails, and the PCI Data Security Standard, which is a multifaceted security standard that is designed to protect credit card account data as mandated by PCI entities.
We are also subject to other laws, regulations and industry standards that govern our business practices, including the Telephone Consumer Protection Act (“TCPA”), which restricts the use of automated tools and technologies to communicate with wireless telephone subscribers or communications services consumers generally, the CAN-SPAM Act, which regulates the transmission of marketing emails, and the Payment Card Industry (“PCI”) Data Security Standard, which is a multifaceted security standard that is designed to protect credit card account data as mandated by PCI entities.
The American Rescue Plan added additional APTCs for individuals at every household income level for 2021 and 2022; those additional APTCs have been renewed for three years through 2025 under the Inflation Reduction Act of 2022.
The American Rescue Plan Act (ARPA) added additional APTCs for individuals at every household income level for 2021 and 2022; those additional APTCs have been renewed for three years through 2025 under the Inflation Reduction Act of 2022.
Any such impacts might require us to incur costs to change our operations, place us at a competitive disadvantage, or materially and adversely affect our ability to market products or to be profitable in those areas.
Any such impacts might require us to incur costs to change our operations, place us at a competitive disadvantage, or materially and adversely affect our ability to market affordable products or to be profitable in those areas.
Additionally, the significant increase in actions brought under the FCA’s “whistleblower” or “qui tam” provisions, which allow private individuals to bring actions on behalf of the government, has caused greater numbers of healthcare companies to have to defend a false claim action, pay fines, or agree to enter into a CIA to avoid being excluded from Medicare and other state and federal health care programs as a result of an investigation arising out of such action.
Additionally, the significant increase in actions brought under the FCA’s “whistleblower” or “qui tam” provisions, which allow private individuals to bring actions on behalf of the government, has caused greater numbers of healthcare companies to have to defend a false claim action, pay fines, or agree to enter into a CIA to avoid being excluded from Medicare and other state and federal healthcare programs as a result of an investigation arising out of such action.
In addition, physicians, hospitals and other health care providers may, consolidate or merge, or form or enter into accountable care organizations, clinically integrated networks, independent practice associations, practice management companies (which aggregate physician practices for administrative efficiency and marketing leverage), and other organizational structures, which may adversely impact our relationships with these providers or affect the way that we price our products and estimate our costs.
In addition, physicians, hospitals and other healthcare providers may, consolidate or merge, or form or enter into accountable care organizations, clinically integrated networks, independent practice associations, practice management companies (which aggregate physician practices for administrative efficiency and marketing leverage), and other organizational structures, which may adversely impact our relationships with these providers or affect the way that we price our products and estimate our costs.
If competitors seek to retain market share by reducing prices, we may be forced to reduce our prices on similar plan offerings in order to remain competitive.
In addition, if competitors seek to retain market share by reducing prices, we may be forced to reduce our prices on similar plan offerings in order to remain competitive.
Further, in 2022 we experienced certain operational challenges implementing full service +Oscar arrangements, including meeting certain service level standards, and a +Oscar client has terminated its +Oscar arrangement.
Further, in 2022 we experienced certain operational challenges implementing full service +Oscar arrangements, including meeting certain service level standards, and a +Oscar client terminated its +Oscar arrangement.
A significant impact on the performance, reliability, security, and availability of our systems, software, or services may harm our reputation and brand, impair our ability to operate, retain existing members, or attract new members, and expose us to legal claims and government action, each of which could have a material adverse impact on our financial condition, results of operations, and growth prospects.
A significant impact on the performance, reliability, security, and availability of our systems, software, or services may harm our reputation and brand, impair our ability to operate, retain existing members, or attract new members, and expose us to legal claims and regulatory action, each of which could have a material adverse impact on our financial condition, results of operations, and growth prospects.
Fluctuations in the price of our Class A common stock may make it more difficult or costly to use equity compensation to hire new employees and to retain, motivate, and incentivize existing employees. For example, from the completion of our IPO through December 31, 2022, our closing stock price ranged from a high of $36.77 to a low of $2.15.
Fluctuations in the price of our Class A common stock may make it more difficult or costly to use equity compensation to hire new employees and to retain, motivate, and incentivize existing employees. For example, from the completion of our IPO through December 31, 2023, our closing stock price ranged from a high of $36.77 to a low of $2.15.
Providers may be unable or unwilling to pay claims they have incurred with third party providers in connection with referral services provided to our members.
Providers may also be unable or unwilling to pay claims they have incurred with third party providers in connection with referral services provided to our members.
In addition to state corporate law limitations, these subsidiaries are subject to more stringent laws and regulations that may restrict the ability to pay or limit the amount of dividends and distributions that can be paid to us without prior approval of, or notification to, state regulators, including mandatory statutory capital and surplus requirements.
In addition to state corporate law limitations, these subsidiaries are subject to more stringent laws, regulations and consent orders that may restrict the ability to pay or limit the amount of dividends and distributions that can be paid to us without prior approval of, or notification to, state regulators, including mandatory statutory capital and surplus requirements.
In certain situations, our health insurance subsidiaries are required to hold our members harmless for out-of-network costs, and to work directly with health care providers within the confines of state law or the No Surprises Act’s dispute resolution process to agree on reimbursement. Reimbursement for these out-of-network costs can be significant.
In certain situations, our health insurance subsidiaries are required to hold our members harmless for out-of-network costs, and to work directly with healthcare providers within the confines of state law or the No Surprises Act’s dispute resolution process to agree on reimbursement. Reimbursement for these out-of-network costs can be significant.
We are subject to extensive fraud, waste, and abuse laws that may require us to take remedial measures or give rise to lawsuits and claims against us, the outcome of which may have a material adverse effect on our business, financial condition, cash flows, or results of operations.
We are subject to extensive fraud, waste, and abuse laws that may require us to take remedial measures or give rise to lawsuits, audits, investigations and claims against us, the outcome of which may have a material adverse effect on our business, financial condition, cash flows, or results of operations.
Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including: • the requirement that a majority of the board of directors consist of independent directors; • the requirement that our nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; 46 Table of Contents • the requirement that our compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and • the requirement for an annual performance evaluation of our nominating and corporate governance and compensation committees.
Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including: • the requirement that a majority of the board of directors consist of independent directors; • the requirement that our nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; • the requirement that our compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and • the requirement for an annual performance evaluation of our nominating and corporate governance and compensation committees.
These covenants, subject to certain limitations and exceptions, restrict our ability, and that of our subsidiaries, to, among other things: 42 Table of Contents • incur indebtedness; • incur certain liens; • enter into sale and lease-back transactions; • make investments, loans, advances, guarantees and acquisitions; • consolidate, merge or sell or otherwise dispose of assets; • pay dividends or make other distributions on equity interests, or redeem, repurchase or retire equity interests; • enter into transactions with affiliates; • alter the business conducted by us and our subsidiaries; and • change our or their fiscal year.
These covenants, subject to certain limitations and exceptions, restrict our ability, and that of our subsidiaries, to, among other things: • incur indebtedness; • incur certain liens; • enter into sale and lease-back transactions; • make investments, loans, advances, guarantees and acquisitions; • consolidate, merge or sell or otherwise dispose of assets; • pay dividends or make other distributions on equity interests, or redeem, repurchase or retire equity interests; • enter into transactions with affiliates; • alter the business conducted by us and our subsidiaries; and • change our or their fiscal year.
Similarly, health care accreditation entities such as the National Committee for Quality Assurance (“NCQA”), evaluate health plans based on various criteria, including effectiveness of care and member satisfaction. Health insurers seeking accreditation from NCQA must pass a rigorous, comprehensive review, and must annually report their performance.
Healthcare accreditation entities, such as the National Committee for Quality Assurance (“NCQA”), evaluate health plans based on various criteria, including effectiveness of care and member satisfaction. Health insurers seeking accreditation from NCQA must pass a rigorous, comprehensive review, and must annually report their performance.
States experiencing such events may enact laws and regulations that require us to cover health care costs for members for which we would not typically be responsible, such as requiring us to relax prior authorization requirements, remove prescription drug refill limitations, and cover out-of-network care.
States experiencing such events may enact laws and regulations that require us to cover healthcare costs for members for which we would not typically be responsible, such as requiring us to relax prior authorization requirements, remove prescription drug refill limitations, and cover out-of-network care.
The terms of our senior secured credit agreement with Wells Fargo Bank, National Association as administrative agent, and certain other lenders for the Revolving Credit Facility in the aggregate principal amount of $200 million, may restrict us and our subsidiaries from engaging in specified types of transactions.
The terms of our senior secured credit agreement with Wells Fargo Bank, National Association, as administrative agent, and certain other lenders for the Revolving Credit Facility in the aggregate principal amount of $115 million, may restrict us and our subsidiaries from engaging in specified types of transactions.
Because the techniques used to circumvent, gain access to, or sabotage security systems, can be highly sophisticated and change frequently, they often are not recognized until launched against a target, and may originate from less regulated and remote areas around the world.
Because the techniques used to circumvent, gain access to, or sabotage IT Systems, can be highly sophisticated and change frequently, they often are not recognized until launched against a target, and may originate from less regulated and remote areas around the world.
The complexity of our systems and platforms, the increased frequency at which vendors are issuing security patches to their products, our need to test patches, and, in some instances, coordinate with third-parties before they can be deployed, all could further increase our risks.
The complexity of our IT Systems, the increased frequency at which vendors are issuing security patches to their products, our need to test patches, and, in some instances, coordinate with third-parties before they can be deployed, all could further increase our risks.
We enter into confidentiality and invention assignment agreements with our employees and consultants, and enter into confidentiality agreements with our third-party providers and strategic partners. We cannot assure you that these agreements will be effective in controlling access to, and use and distribution of, our platform and proprietary information.
We enter into confidentiality and invention assignment agreements with our employees and consultants, and enter into confidentiality agreements with our third-party providers and strategic partners. We cannot assure you that these agreements will not be breached and will be effective in controlling access to, and use and distribution of, our platform and proprietary information.
The healthcare regulatory landscape can change unpredictably and rapidly due to changes in political party legislative majorities or executive branch administrations at the state or federal level in the United States and could, among other things: 26 Table of Contents • require us to restructure our relationships with providers within our network; • require us to contract with additional providers at unfavorable terms; • require us to cover certain forms of care provided by out-of-network providers at rates or levels indicated by rule or statute; • require us to implement changes to our healthcare services and types of coverage, including the offering of standardized plans in addition to or in lieu of non-standardized benefit plan offerings, or prevent us from innovating and implementing technology solutions; • require us to provide healthcare coverage to a higher risk population without the opportunity to adjust our premiums; • require us to implement costly processes and compliance infrastructure; • require us to make changes that restrict revenue and enrollment growth; • increase our sales, marketing, and administrative costs, including costs attributable to broker commissions; • impose additional capital and surplus requirements, which may require us to incur additional indebtedness, sell capital stock, or access other sources of funding; • make it more difficult to obtain regulatory approvals to operate our business or maintain existing regulatory approvals; • prevent or delay us from entering into new service areas or product lines; and • increase or change our liability to members in the event of malpractice by our contracted providers.
The healthcare regulatory landscape can change unpredictably and rapidly due to changes in political party legislative majorities or executive branch administrations at the state or federal level in the United States and could, among other things: • require us to restructure our relationships with providers within our network; • require us to contract with additional providers at unfavorable terms; • require us to cover certain forms of care provided by out-of-network providers at rates or levels indicated by rule or statute; • require us to implement changes to our healthcare services and types of coverage, including the offering of standardized plans in addition to or in lieu of non-standardized benefit plan offerings, or prevent us from innovating and implementing technology solutions; • require us to provide healthcare coverage to a higher risk population without the opportunity to adjust our premiums; • require us to change our telehealth delivery methods and payment models; • require us to implement costly processes and compliance infrastructure; • require us to make changes that restrict revenue and enrollment growth; • increase our sales, marketing, and administrative costs, including costs attributable to broker commissions; • impose additional capital and surplus requirements, which may require us to incur additional indebtedness, sell capital stock, or access other sources of funding; • make it more difficult to obtain regulatory approvals to operate our business or maintain existing regulatory approvals; • prevent or delay us from entering into new service areas or product lines; and • increase or change our liability to members in the event of malpractice by our contracted providers.
The occurrence of any of these events could result in increased utilization or medical costs in these states or any other geographic area where our membership becomes concentrated in the future, and could therefore have a disproportionately adverse effect on our operating results.
The occurrence of any of these factors could result in increased utilization or medical costs in these states or any other geographic area where our membership becomes concentrated in the future, and could therefore have a disproportionately adverse effect on our operating results.
If we were unable to repay or otherwise refinance these borrowings and loans when due, and the applicable lenders proceeded against the collateral granted to them to secure that indebtedness, we may be forced into bankruptcy or liquidation.
If we were unable to repay or otherwise refinance these borrowings and loans when due, and the applicable lenders proceeded to exercise remedies against the collateral granted to them to secure that indebtedness, we may be forced into bankruptcy or liquidation.
Our profitability depends, in large part, upon our ability to contract at competitive prices with hospitals, physicians, and other health care providers, such that we can provide our members with access to competitive provider networks at affordable prices. Our arrangements with health care providers generally may be terminated or not renewed by either party without cause upon prior written notice.
Our profitability depends, in large part, upon our ability to contract at competitive prices with hospitals, physicians, and other healthcare providers, such that we can provide our members with access to competitive provider networks at affordable prices. Our arrangements with healthcare providers generally may be terminated or not renewed by either party without cause upon prior written notice.
The sudden loss of any of our providers or the renegotiation of any of our provider contracts could adversely impact our reputation or the breadth and perceived quality of our provider networks, which could result in a loss of a membership that adversely affects our revenue and operating results.
The sudden loss of any of our providers or the renegotiation of related provider contracts could adversely impact our reputation or the breadth of access and perceived quality of our provider networks, which could result in a loss of a membership that adversely affects our revenue and operating results.
While we expect that our relationship with the Oscar Medical Group will continue, a material change in our relationship with the Oscar Medical Group, whether resulting from a dispute among the entities or the loss of these relationships or contracts with the Oscar Medical Group, may temporarily disrupt our ability to provide virtual health care services to our members or through our +Oscar platform arrangements and could harm our business.
While we expect that our relationship with the Oscar Medical Group will continue, a material change in our relationship with the Oscar Medical Group, whether resulting from a dispute among the entities or the loss of these relationships or contracts with the Oscar Medical Group, may temporarily disrupt our ability to provide virtual healthcare services to our members or through our +Oscar platform arrangements and could harm our business.
There is no assurance that a reduction in our plan pricing would enable us to maintain our competitive position, and any such reduction could impact our financial condition or require a change in our operating strategies. As a result of these factors, entering new markets or introducing new health plans may decrease our profitability.
There is no assurance that a reduction in our plan pricing would enable us to maintain our competitive position, and any such 21 Table of Contents reduction could impact our financial condition or require a change in our operating strategies. As a result of these factors, entering new markets or introducing new health plans may decrease our profitability.
The ACA implemented certain requirements for insurers, including changes to Medicare Advantage payments, a minimum MLR provision that requires insurers to pay rebates to consumers when insurers do not meet or exceed specified annual MLR thresholds, and anti-discrimination protections on the basis of race, color, national origin, sex, age, and disability, which may impact the manner in which health insurers receiving any form of federal financial assistance design and implement their benefit packages.
The ACA implemented certain requirements for insurers, including a minimum MLR provision that requires insurers to pay rebates to consumers when insurers do not meet or exceed specified annual MLR thresholds, and anti-discrimination protections on the basis of race, color, national origin, sex, age, and disability, which may impact the manner in which health insurers receiving any form of federal financial assistance design and implement their benefit packages.
For example, we estimate that had we not had any quota share reinsurance arrangements in place, the insurance subsidiaries would have been required to hold approximately $447 million of additional capital as of December 31, 2022, which Parent would have been required to fund to the extent the applicable insurance subsidiary did not have excess capital to cover the requirement.
For example, we estimate that had we not had any quota share reinsurance arrangements in place, the insurance subsidiaries would have been required to hold approximately $447.1 million of additional capital as of December 31, 2023, which Parent would have been required to fund to the extent the applicable insurance subsidiary did not have excess capital to cover the requirement.
In the past, we have experienced, and third-party service providers who process information on our behalf have experienced, and disclosed to applicable regulatory authorities, data breaches resulting in disclosure of confidential information or PHI.
In the past, we have experienced, and third-party service providers who process information on our behalf have experienced, and disclosed to applicable regulatory authorities, data breaches resulting in disclosure of Confidential Information.
Health care providers within our provider networks may not properly manage the costs of services, maintain financial solvency or avoid disputes with other providers or their federal and state regulators. Any of these events could have a material adverse effect on the provision of services to our members and our operations.
Healthcare providers within our provider networks may not properly manage the costs of services, maintain financial solvency or avoid disputes with other providers or their federal and state regulators. Any of these events could have a material adverse effect on the provision of services to our members and our operations.
Each of our Co-Founders, members of our senior management team, specialized technology and insurance experts, key technical personnel, and other employees could terminate their relationship with us at any time. The loss of key personnel might significantly delay or prevent the achievement of our strategic business objectives and could harm our business.
Our Chief Executive Officer, each of our Co-Founders, other members of our senior management team, specialized technology and insurance experts, key technical personnel, and other employees could terminate their relationship with us at any time. The loss of key personnel might significantly delay or prevent the achievement of our strategic business objectives and could harm our business.
Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could impair the functionality of our platform, delay introductions of enhancements to our platform, result in our substituting inferior or more costly technologies into our platform, or harm our reputation or brand.
Our inability to protect our proprietary technology against unauthorized 42 Table of Contents copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could impair the functionality of our platform, delay introductions of enhancements to our platform, result in our substituting inferior or more costly technologies into our platform, or harm our reputation or brand.
In addition, regardless of the outcome of any litigation or regulatory proceedings, investigations, audits, or reviews, responding to such matters is costly and time consuming, and requires significant attention from our management, and could, therefore, harm our business and financial position, results of operations or cash flows.
In addition, regardless of the 35 Table of Contents outcome of any litigation or regulatory proceedings, investigations, audits, or reviews, responding to such matters is costly and time consuming, and requires significant attention from our management, and could, therefore, harm our business and financial position, results of operations or cash flows.
Further, our inability to estimate our claims liability may also affect our ability to take timely corrective actions, further exacerbating the extent of any adverse effect on our results. 23 Table of Contents We also incur substantial administrative costs, particularly distribution costs, the costs of scaling and improving our operations and the costs of hiring and retaining personnel.
Further, our inability to estimate our claims liability may also affect our ability to take timely corrective actions, further exacerbating the extent of any adverse effect on our results. We also incur substantial administrative costs, particularly distribution costs, the costs of scaling and improving our operations and the costs of hiring and retaining personnel.
State corporate practice and fee-splitting prohibitions also often impose penalties on healthcare professionals for aiding in the improper rendering of professional services, which could discourage physicians and other healthcare professionals from providing clinical services that are currently available to our members.
State corporate practice and fee-splitting prohibitions also often impose penalties on healthcare professionals for aiding in the improper rendering of professional services, which could 41 Table of Contents discourage physicians and other healthcare professionals from providing clinical services that are currently available to our members.
From time to time, we are a defendant in lawsuits and the subject of regulatory actions, and are subject to audits, reviews, assessments and investigations relating to our business, including, without limitation, claims by members alleging failure to provide coverage or pay for or authorize payment for health care, claims related to non-payment or insufficient payments for services by providers, including for alleged failure to properly pay in-network and out-out-network claims, claims under U.S. securities laws, claims of trademark and other intellectual property infringement, claims alleging bad faith or unfair business practices, challenges to the manner in which the Company processes claims, claims relating to sales, marketing and other business practices, inquiries regarding our submission of risk adjustment data, enforcement actions by state regulatory bodies alleging non-compliance with state law, financial and market conduct examinations by state regulatory bodies, and claims related to the imposition of new taxes, including, but not limited to, claims that may have retroactive application.
From time to time, we may be a defendant in lawsuits and the subject of regulatory actions, and are subject to audits, reviews, assessments and investigations relating to our business, including, without limitation, claims by members alleging failure to provide coverage or pay for or authorize payment for healthcare, claims related to non-payment or insufficient payments for services by providers, including for alleged failure to properly pay in-network and out-out-network claims, claims under U.S. securities laws, claims related to breach of contract, employment related claims, claims of trademark and other intellectual property infringement or misappropriation, claims alleging bad faith or unfair business practices, challenges to the manner in which the Company processes claims, claims relating to sales, marketing and other business practices, inquiries regarding our submission of risk adjustment data, enforcement actions by state regulatory bodies alleging non-compliance with state law, financial and market conduct examinations by state regulatory bodies, and claims related to the imposition of new taxes, including, but not limited to, claims that may have retroactive application.
It is difficult to predict the amount we may have to pay to out-of-network providers. The uncertainty of the amount to pay to such providers and the possibility of subsequent adjustment of the payment could materially and adversely affect our business, financial condition, cash flows, or results of operations.
It is difficult to predict the amount we may have to pay to out-of-network 31 Table of Contents providers. The uncertainty of the amount to pay to such providers and the possibility of subsequent adjustment of the payment could materially and adversely affect our business, financial condition, cash flows, or results of operations.
Under the terms of the management services agreements between Oscar Management Corporation and the Oscar Medical Group, the Oscar Medical Group retains sole responsibility for all medical decisions, as well as for hiring and managing physicians and other licensed health care providers, developing operating policies and procedures, and implementing professional standards and controls.
Under the terms of the management services agreements between Oscar Management Corporation and the Oscar Medical Group, the Oscar Medical Group retains sole responsibility for all medical decisions, as well as for hiring and managing physicians and other licensed healthcare providers, developing operating policies and procedures, and implementing professional standards and controls.
We may also pursue opportunistic partnerships and acquisitions to allow us to provide better health care options for our members as well as to augment existing operations, and we may be in discussions with respect to one or more partnerships or acquisitions at any given time.
We may also pursue opportunistic partnerships and acquisitions to allow us to provide better healthcare options for our members as well as to augment existing operations, and we may be in discussions with respect to one or more partnerships or acquisitions at any given time.
In addition, in each of the markets in which we operate, we are regulated by the relevant insurance and/or health and/or human services, or other government departments that oversee the activities of insurance and/or healthcare organizations providing or arranging to provide services to Medicare Advantage members, Health Insurance Marketplace enrollees, or other beneficiaries.
In addition, in each of the markets in which we operate, we are regulated by the relevant insurance and/or health and/or human services, or other government departments that oversee the activities of insurance and/or healthcare organizations providing or arranging to provide services to Health Insurance Marketplace enrollees or other beneficiaries.
We cannot provide any assurance that we will be able to renew our existing contracts or enter into new contracts on a timely basis or under favorable terms enabling us to service our members profitably in the future.
We cannot provide any assurance that we will be able to renew our existing contracts or enter into new contracts on a timely basis or under favorable reimbursement rates and terms enabling us to service our members profitably in the future.
If we fail to effectively implement or appropriately adjust our operational and strategic initiatives with respect to the implementation of health care reform, or do not do so as effectively as our competitors, our results of operations may be materially and adversely affected.
If we fail to effectively implement or appropriately adjust our operational and strategic initiatives with respect to the implementation of healthcare reform, or do not do so as effectively as our competitors, our results of operations may be materially and adversely affected.
In any particular market or geography, physicians and other health care providers could refuse to contract, demand higher payments, demand favorable contract terms, or take other actions that could result in higher medical costs or difficulty in meeting regulatory or accreditation requirements, among other things.
In any particular market or geography, physicians and other healthcare providers could refuse to contract, demand higher payments, demand favorable contract terms, or take other actions that could result in higher medical costs or difficulty in meeting regulatory or accreditation requirements, among other things.
Our systems and facilities are also subject to compromise from internal threats such as accidental or improper action by employees, including malicious insiders, or by vendors, counterparties, and other third parties with otherwise legitimate access to our systems.
Our IT Systems, Confidential Information and facilities are also subject to compromise from internal threats such as accidental or improper action by employees, including malicious insiders, or by vendors, counterparties, and other third parties with otherwise legitimate access to our systems.
Increased focus, including from regulators, investors, employees and clients, on ESG matters may result in increased costs (including but not limited to increased costs related to compliance and stakeholder engagement), impact our reputation, or otherwise affect our business performance.
Increased focus, including from regulators, investors, employees, clients, competitors and other stakeholders on ESG matters may result in increased costs (including but not limited to increased costs related to compliance and stakeholder engagement), impact our reputation, or otherwise affect our business performance.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the 2031 Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors 43 Table of Contents beyond our control.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the 2031 Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
For the years ended December 31, 2022 and 2021, approximately 99%, and 98%, respectively, of our revenue was derived from sales of health plans subject to regulation under the ACA, primarily comprised of policies directly purchased by individuals and families and secondarily comprised of policies purchased by small employers and provided to their employees as a benefit.
For the years ended December 31, 2023 and 2022, approximately 97%, and 99%, respectively, of our revenue was derived from sales of health plans subject to regulation under the ACA, primarily comprised of policies directly purchased by individuals and families and secondarily comprised of policies purchased by small employers and provided to their employees as a benefit.
We have in the past, and we may in the future, fail to take actions mandated by federal and/or state laws or regulations with respect to changes in our health benefits, the health insurance policies for which individuals are eligible, proposed or actual premiums, and/or other aspects of individuals’ health insurance coverage.
We have failed in the past, and we may in the future fail, to take actions mandated by federal and/or state laws or regulations with respect to changes in our health benefits, the health insurance policies for which individuals are eligible, proposed or actual premiums, and/or other aspects of individuals’ health 26 Table of Contents insurance coverage.
For example, laws similar to the CCPA and CPRA have passed in Virginia and Colorado, and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States.
For example, laws similar to the CCPA and CPRA have passed in Virginia, Connecticut, Texas, Utah, and Colorado, and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States.
Any inability or failure to protect our intellectual property could adversely impact our business, results of operations, and financial condition. 41 Table of Contents We have filed, and may in the future file, applications to protect certain of our innovations and intellectual property.
Any inability or failure to protect our intellectual property could adversely impact our business, results of operations, and financial condition. We have filed, and may in the future file, applications to protect certain of our innovations and intellectual property.
HIPAA requires covered entities and business associates to develop and maintain policies and procedures with respect to the protection of, use and disclosure of PHI, and to implement administrative, physical, and technical safeguards to protect PHI, including PHI Processed in electronic form, and to adhere to certain notification requirements in the event of a breach of unsecured PHI.
HIPAA requires covered entities and business associates to develop and maintain policies and procedures with respect to the protection of, use and disclosure of protected health information (“PHI”), and to implement administrative, physical, and technical safeguards to protect PHI, including PHI Processed in electronic form, and to adhere to certain notification requirements in the event of a breach of unsecured PHI.
Alternatively, if a court were to find the choice of forum provisions contained in our Amended Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and results of operations. 49 Table of Contents General Risk Factors The obligations associated with being a public company require significant resources and management attention, and we have and will continue to incur increased costs as a result of being a public company.
Alternatively, if a court were to find the choice of forum provisions contained in our Amended Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and results of operations. 49 Table of Contents General Risk Factors The obligations associated with being a public company require significant resources and management attention.
In December 2020, Congress passed the No Surprises Act, which requires health insurers to hold members harmless for out-of-network costs in certain circumstances, and requires that insurers and healthcare providers work to agree on out-of-network reimbursement, including through utilizing the independent dispute resolution process outlined in the No Surprises Act or a similar process established under applicable state law.
In December 2020, Congress passed the No Surprises Act, which became effective on January 1, 2022, and requires health insurers to hold members harmless for out-of-network costs in certain circumstances, and requires that insurers and healthcare providers work to agree on out-of-network reimbursement, including through utilizing the independent dispute resolution process outlined in the No Surprises Act or a similar process established under applicable state law.
Accordingly, despite our best efforts to do so, we may not achieve or maintain profitability, and we may incur further significant losses in the future. Any potential repeal of, changes to, or judicial challenges to the ACA and its regulations, could materially and adversely affect our business, results of operations, and financial condition.
Accordingly, despite our best efforts to do so, we may not achieve or maintain profitability, and we may incur further significant losses in the future. Any changes to the ACA and its regulations could materially and adversely affect our business, results of operations, and financial condition.
We also engage with other third parties, including Atlassian Corporation Plc, Appian Corporation and inContact, Inc. for our product offerings and internal operations.
We also engage with other third parties, including Appian Corporation and inContact, Inc. for our product offerings and internal operations.
As part of our normal operations, we and our partners and other third parties with whom we collaborate routinely collect, process, store, and transmit large amounts of data, including PHI subject to HIPAA and other federal and state laws and regulations, as well as proprietary or confidential information relating to our business or third parties, including our members, providers, and vendors.
As part of our normal operations, we and our partners and other third parties with whom we collaborate routinely collect, process, store, and transmit large amounts of Confidential Information, including PHI subject to HIPAA and other federal and state laws and regulations, relating to our business and third parties, including our members, providers, and vendors.
In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the 2031 Notes or pay any cash amounts due upon conversion. Our failure to repurchase the 2031 Notes or pay any cash amounts due upon conversion when 44 Table of Contents required will constitute a default under the Indenture.
In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the 2031 Notes or pay any cash amounts due upon conversion. Our failure to repurchase the 2031 Notes or pay any cash amounts due upon conversion when required will constitute a default under the Indenture.
We enter into quota share reinsurance arrangements to reduce our capital and surplus requirements, which enables us to more efficiently deploy capital to finance our growth, and to obtain protection against downside risk on medical claims. Our reinsurers are entitled to a portion of our premiums, but also share financial responsibility for health care costs incurred by our members.
We enter into quota share reinsurance arrangements to meet our capital and surplus requirements, which enables us to more efficiently deploy capital to finance our growth, and to obtain protection against downside risk on medical claims. Our reinsurers are entitled to a portion of our premiums, but also share financial responsibility for healthcare costs incurred by our members.
Ongoing vigorous legal enforcement and the highly technical regulatory scheme mean that our compliance efforts in this area will continue to require significant resources, and we may not always be successful in ensuring 35 Table of Contents appropriate compliance by our Company, employees, consultants, or vendors, for whose compliance or lack thereof we may be held responsible and liable.
Ongoing vigorous legal enforcement and the highly technical regulatory scheme mean that our compliance efforts in this area will continue to require significant resources, and we may not always be successful in ensuring appropriate compliance by our employees, consultants, or vendors, for whose compliance or lack thereof we may be held responsible and liable.
We cannot assure you that we will satisfy the financial covenants in the future, or that our lenders will waive any failure to satisfy the financial covenants. Our debt obligations contain restrictions that impact our business and expose us to risks that could materially adversely affect our liquidity and financial condition.
We cannot assure you that we will satisfy the financial covenants in the future, or that our lenders will waive any failure to satisfy the financial covenants. 44 Table of Contents Our debt obligations contain restrictions that impact our business and expose us to risks that could materially adversely affect our liquidity and financial condition.
Our vendor and 34 Table of Contents service provider arrangements could be adversely impacted by changes in vendors’ or service providers’ operations or financial condition, or other matters outside of our control.
Our vendor and service provider arrangements could be adversely impacted by changes in vendors’ or service providers’ operations or financial condition, or other matters outside of our control.
There are many factors that could negatively affect our ability to retain existing members and expand our member base, many of which are beyond our direct control, including if: • we are unable to remain competitive on member experience, pricing, and insurance coverage options; • we are unable to gain access to quality providers; • we are unable to develop or maintain competitive provider networks; • our competitors or new market entrants successfully mimic our innovative product offerings or our full stack technology platform; • as a result of changes in law or otherwise, our competitors participate in the Individual and Small Group markets to a greater extent than they have previously; • our digital platform experiences technical or other problems or disruptions that frustrate the experience of members or providers or other third party partners; • we or our partners or other third parties with whom we collaborate sustain a cyber-attack or suffer privacy or data security breaches; • we experience unfavorable shifts in perception of our digital platform or other member service channels; • we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate; • we are unable to maintain licenses and approvals, or there are material modifications or restrictions on our ability to offer insurance in our current markets or to participate on Health Insurance Marketplaces, obtain licenses and approvals to offer insurance in new markets, or to otherwise expand our plan offerings in an economically sustainable manner; • we fail to continue to offer new and competitive products; • our strategic partners terminate or fail to renew our current contracts or we fail to enter into contracts with new strategic partners; • there is an initiation of new Special Enrollment Periods or other unexpected healthcare market developments; 22 Table of Contents • insurance brokers that we rely on to build our member base are unable to market our insurance products effectively; or • we fail to attract brokers to sell our insurance products or lose important broker relationships to our competitors or otherwise.
There are many factors that could negatively affect our ability to retain existing members and expand our member base, many of which are beyond our direct control, including if: • we are unable to remain competitive on member experience, pricing, and insurance coverage options; • we are unable to gain access to quality providers; • we are unable to develop or maintain competitive provider networks; • our competitors or new market entrants successfully mimic our innovative product offerings or our full stack technology platform; • initiatives designed to improve member and provider experience, including the use of new technologies such as artificial intelligence or machine learning, are unsuccessful or discontinued, whether as a result of actions by us, our competitors, regulators, or other third parties; 22 Table of Contents • as a result of changes in law or otherwise, our competitors participate in the individual and small group markets to a greater extent than they have previously; • our digital platform experiences technical or other problems or disruptions that frustrate the experience of members or providers or other third party partners; • we or our partners or other third parties with whom we collaborate sustain a cyber-attack or suffer privacy or data security breaches; • we experience unfavorable shifts in perception of our digital platform or other member service channels; • we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate; • we are unable to maintain licenses and approvals, or there are material modifications or restrictions on our ability to offer insurance in our current markets or to participate on Health Insurance Marketplaces, obtain licenses and approvals to offer insurance in new markets, or to otherwise expand our plan offerings in an economically sustainable manner; • we fail to continue to offer differentiated and competitive products, including as a result of new or revised regulations, such as the NBPP; • our strategic partners terminate or fail to renew our current contracts or we fail to enter into contracts with new strategic partners; • there is an initiation of new Special Enrollment Periods or other unexpected healthcare market developments; • insurance brokers that we rely on to build our member base are unable to market our insurance products effectively; or • we fail to attract brokers to sell our insurance products or lose important broker relationships to our competitors or otherwise.
For example, prior to the 2023 Open Enrollment Period, the Company requested that regulators limit its membership growth in Florida above a certain threshold so that total membership across all markets would be within its previously announced target range of 900,000 to 1,100,000 at the close of Open Enrollment, which the Company believed would enable it to prudently manage its capital position.
For example, prior to the 2023 Open Enrollment Period, we requested that regulators limit our membership growth in Florida above a certain threshold so that total membership across all markets would be within our previously announced target range of 900,000 to 1,100,000 at the close of Open Enrollment, which we believed would enable us to prudently manage our capital position.
We may not be able to do so on our expected timetable or at all, or to otherwise expand our 21 Table of Contents administrative service offerings and perform on our +Oscar or other commitments in an economically sustainable manner.
We may not be able to do so on our expected timetable or at all, or to otherwise expand our administrative service offerings and perform on our +Oscar or other commitments in an economically sustainable manner.

… 275 more changes not shown on this page.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeGiven that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, results of operations, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. PART II
Biggest changeGiven that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, results of operations, financial condition or cash flows. 51 Table of Contents Item 4. Mine Safety Disclosures Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 51 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 51 Item 6. [Reserved] 53 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 54 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 70 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 52 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 52 Item 6. [Reserved] 53 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 54 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 71 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−3 removed6 unchanged
Biggest changeCompany/Index March 3, 2021 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Oscar Health, Inc. $ 100.00 $ 77.24 $ 61.78 $ 49.97 $ 22.56 $ 28.65 $ 12.21 $ 14.34 $ 7.07 S&P 500 $ 100.00 $ 104.00 $ 113.00 $ 113.00 $ 125.00 $ 119.00 $ 100.00 $ 95.00 $ 103.00 S&P Managed HealthCare $ 100.00 $ 112.00 $ 121.00 $ 116.00 $ 148.00 $ 151.00 $ 152.00 $ 149.00 $ 158.00 Morgan Stanley Digital Health $ 100.00 $ 95.91 $ 103.91 $ 88.31 $ 68.99 $ 57.39 $ 42.40 $ 47.50 $ 38.53
Biggest changeCompany/Index 03/03/21 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22 03/31/23 06/30/23 09/30/23 12/31/23 Oscar Health, Inc. $ 100.00 $ 77.24 $ 61.78 $ 49.97 $ 22.56 $ 28.65 $ 12.21 $ 14.34 $ 7.07 $ 18.79 $ 23.16 $ 16.01 $ 26.29 S&P 500 $ 100.00 $ 104.00 $ 113.00 $ 113.00 $ 125.00 $ 119.00 $ 100.00 $ 95.00 $ 103.00 $ 110.00 $ 120.00 $ 116.00 $ 129.00 Morgan Stanley Digital Health $ 100.00 $ 95.91 $ 103.91 $ 88.31 $ 68.99 $ 57.39 $ 42.40 $ 47.50 $ 38.53 $ 41.23 $ 43.81 $ 33.25 $ 32.80 Peer Group $ 100.00 $ 109.79 $ 117.43 $ 108.24 $ 128.42 $ 130.67 $ 127.00 $ 127.93 $ 136.76 $ 113.88 $ 113.65 $ 114.26 $ 123.25
The graph assumes that $100 was invested on March 3, 2021 in each of our Class A common stock, the S&P 500 Index, the Morgan Stanley Digital Health Index and the S&P Managed Healthcare Index, and that any dividends were reinvested.
The graph assumes that $100 was invested on March 3, 2021 in each of our Class A common stock, the S&P 500 Index, the Peer Group, and the Morgan Stanley Digital Health Index, and that any dividends were reinvested.
Holders As of January 31, 2023, there were 38 holders of record of our Class A common stock and 11 holders of record of our Class B common stock. 51 Table of Contents Dividend Policy We have never declared or paid any cash dividends on our capital stock.
Holders As of January 31, 2024, there were 24 holders of record of our Class A common stock and 11 holders of record of our Class B common stock. Dividend Policy We have never declared or paid any cash dividends on our capital stock.
The graph also shows performance of the S&P Managed Healthcare Index, which is the index the Company selected in the Annual Report on Form 10-K filed for the fiscal year ended December 31, 2021.
The graph also shows performance of the Morgan Stanley Digital Health Index, which is the index the Company selected for the Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Neither the Company nor any affiliated purchaser purchased any equity securities of the Company during the quarter ended December 31, 2022. 52 Table of Contents Performance Graph The following graph illustrates the cumulative total shareholder return on our Class A common stock from March 3, 2021, the first day the Company's stock was publicly traded, through December 31, 2022, relative to the performance of the S&P 500 Index and the Morgan Stanley Digital Health Index.
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchasers None. 52 Table of Contents Performance Graph The following graph illustrates the cumulative total shareholder return on our Class A common stock from March 3, 2021, the first day the Company's stock was publicly traded, through December 31, 2023, relative to the performance of the S&P 500 Index and a group of ten peers selected by the Company (the “Peer Group”).
The comparisons reflected in the graph are not intended to forecast or otherwise be indicative of the future performance of our stock.
We selected the Peer Group rather than the index used for the immediately preceding fiscal year because we believe the Peer Group is a better comparator group for our business. The comparisons reflected in the graph are not intended to forecast or otherwise be indicative of the future performance of our stock.
Removed
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser The Company did not sell any equity securities during the year ended December 31, 2022 that were not registered under the Securities Act.
Added
The Peer Group is composed of Centene Corporation, Molina Healthcare, Inc., CVS Health Corporation, Cigna Group, Elevance Health, Inc., Agilon Health Inc., Alignment Healthcare, Inc., Evolent Health, Inc., Privia Health Group, Inc., Teladoc, and Accolade, Inc.
Removed
The Morgan Stanley Digital Health Index is composed of Oak Street Health, One Medical, Agilon, Veeva System, Evolent Health, Doximity, Privia Health, R1 RCM, Teladoc, Phreesia, American Well, GoodRx, the Company, Accolade, Health Catalyst, Definitive Healthcare, Alignment Health, Cano Health, LifeStance Health, Bright Health, Sharecare and CareMax.
Added
The Peer Group was chosen based on (i) industry, including managed care and healthcare technology companies, with emphasis on direct competitors and close industry peers, (ii) revenue, and (iii) market capitalization.
Removed
We selected a different index than the index used for the immediately preceding fiscal year because we believe the Morgan Stanley Digital Health Index represents a broader mix of health tech companies to which we are more closely aligned.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

102 edited+31 added−30 removed36 unchanged
Biggest changeThe potential for a large claim under an insurance or reinsurance contract means that our health insurance subsidiaries may need to make substantial payments within relatively short periods of time, which would have a negative impact on our operating cash flows. 67 Table of Contents The following table shows summary cash flows information for the periods indicated: Year Ended December 31, 2022 2021 Change (in thousands) Net cash provided by (used in) operating activities $ 380,349 $ (181,745) $ 562,094 Net cash used in investing activities (226,519) (774,515) 547,996 Net cash provided by financing activities 301,110 1,238,712 (937,602) Net increase in cash and cash equivalents and restricted cash equivalents $ 454,940 $ 282,452 $ 172,488 Operating Activities Net cash provided by (used in) operating activities increased $562.1 million to $380.3 million for the year ended December 31, 2022, compared to $181.7 million used in operating activities for the year ended December 31, 2021, primarily due to membership growth, which resulted in increased premiums and accounts receivable and reinsurance recoverable under our quota share reinsurance program.
Biggest changeThe potential for a large claim under an insurance or reinsurance contract means that our health insurance subsidiaries may need to make substantial payments within relatively short periods of time, which would have a negative impact on our operating cash flows.
General and Administrative Expenses General and administrative expenses primarily include wages, benefits, costs of software and hardware, and administrative costs for our corporate and technology functions. Such functions include, but are not limited to executive management, and portions of legal, finance and information systems, including product management and development.
General and Administrative Expenses General and administrative expenses primarily include wages, benefits, costs of software and hardware, and administrative costs for our corporate and technology functions. Such functions include, but are not limited to executive management, portions of legal, finance, and information systems, including product management and development.
For example, in recent months, we estimate claim costs incurred by applying assumed medical cost trends to the PMPM medical costs incurred in prior months for which more complete claim data is available, supplemented by a review of near-term completion factors. Additional consideration is also given to settled claims that may reopen as a result of provider disputes.
For example, in recent months, we estimate claim costs incurred by applying assumed medical cost trends to the PMPM medical costs incurred in prior months for which more complete claim data is available, supplemented by a review of near-term completion factors. Additional consideration is also given to adjudicate claims that may reopen as a result of provider disputes.
Medical claims include fee-for-service claims, pharmacy benefits, capitation payments to providers, provider disputed claims and various other medical-related costs. Under fee-for-service claims arrangements with providers, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Medical claims are recognized in the period health care services are provided.
Medical claims include fee-for-service claims, pharmacy benefits, capitation payments to providers, provider disputed claims and various other medical-related costs. Under fee-for-service claims arrangements with providers, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Medical claims are recognized in the period healthcare services are provided.
As of December 31, 2022, we were in compliance with all financial covenants under the Revolving Credit Facility. Investments We generally invest cash of our health insurance subsidiaries in U.S. treasury and agency securities. We primarily invest cash of the Company in investment-grade, marketable debt securities to improve our overall investment return.
As of December 31, 2023, we were in compliance with all financial covenants under the Revolving Credit Facility. Investments We generally invest cash of our health insurance subsidiaries in U.S. treasury and agency securities. We primarily invest cash of the Company in investment-grade, marketable debt securities to improve our overall investment return.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this filing. The discussion contains forward-looking statements that involve known and unknown risks and uncertainties.
Item 7. Management’s Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited Consolidated Financial Statements and the related notes included elsewhere in this filing. The discussion contains forward-looking statements that involve known and unknown risks and uncertainties.
The following discussion and analysis does not include certain items related to the year ended December 31, 2020, including year-to-year comparisons between the year ended December 31, 2021 and the year ended December 31, 2020. For a comparison of our results of operations for the fiscal years ended December 31, 2021 and December 31, 2020, see Item 7.
The following discussion and analysis does not include certain items related to the year ended December 31, 2021, including year-to-year comparisons between the year ended December 31, 2022 and the year ended December 31, 2021. For a comparison of our results of operations for the fiscal years ended December 31, 2022 and December 31, 2021, see Item 7.
(4) See Note 3 - Revenue Recognition to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for an explanation of premiums before ceded reinsurance. (5) Represents excess of loss insurance premiums paid. MLR improved for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
(4) See Note 3 - Revenue Recognition to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for an explanation of premiums before ceded reinsurance. (5) Represents excess of loss reinsurance premiums paid. MLR improved for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Claims incurred, net also reflects the net impact of our ceded reinsurance claims. Other Insurance Costs Other insurance costs primarily include distribution costs, including broker commissions, wages, benefits, marketing, rent, costs of software and hardware, unallocated claims adjustment expenses, and administrative costs associated with functions that are necessary to support our health insurance business.
Claims incurred, net also reflects the net impact of our ceded reinsurance claims. 61 Table of Contents Other Insurance Costs Other insurance costs primarily include distribution costs, including broker commissions, wages, benefits, marketing, rent, costs of software and hardware, unallocated claims adjustment expenses, and administrative costs associated with functions that are necessary to support our health insurance business.
Unpaid medical expenses include claims reported and in the process of being settled, but that have not yet been paid, as well as health care costs incurred but not yet reported to us, which are collectively referred to as benefits payable or claim reserves.
Unpaid medical expenses include claims reported and in the process of being settled, but that have not yet been paid, as well as healthcare costs incurred but not yet reported to us, which are collectively referred to as benefits payable or claim reserves.
The ratio reflects the costs associated with running our combined insurance companies. We believe InsuranceCo Administrative Expense Ratio is useful to evaluate our ability to manage our expenses as a percentage of premiums before the impact of quota share reinsurance. Expenses necessary to run the insurance company are included in other insurance costs and federal and state assessments.
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.
Our Revolving Credit Facility is secured by a lien on substantially all of our and the Guarantors’ assets (subject to certain exceptions). Proceeds are to be used solely for general corporate purposes of the Company. The Revolving Credit Facility is available until February 2024, provided we are in compliance with all covenants.
Our Revolving Credit Facility is secured by a lien on substantially all of our and the Guarantors’ assets (subject to certain exceptions). Proceeds are to be used solely for general corporate purposes of the Company. The Revolving Credit Facility is available until December 2025, provided we are in compliance with all covenants.
If the revised estimate of prior period health care claims is less than the previous estimate, we will decrease reported health care claims in the current period (favorable development). If the revised estimate of prior period health care claims is more than the previous estimate, we will increase reported health care costs in the current period (unfavorable development).
If the revised estimate of prior period healthcare claims is less than the previous estimate, we will decrease reported healthcare claims in the current period (favorable development). If the revised estimate of prior period healthcare claims is more than the previous estimate, we will increase reported healthcare costs in the current period (unfavorable development).
During periods of increased volatility, such as the current macroeconomic environment, adverse securities and credit markets, including due to rising interest rates, may exert downward pressure on the availability of liquidity and credit capacity for certain issuers, and any such funding may not be available on favorable terms, or at all.
During periods of increased volatility, adverse securities and credit markets, including those due to rising interest rates, may exert downward pressure on the availability of liquidity and credit capacity for certain issuers, and any such funding may not be available on favorable terms, or at all.
Reinsurance We believe our reinsurance agreements help us achieve important goals for our business, including risk management, capital efficiency, and greater predictability in our earnings in the event of unexpected significant fluctuations in MLR.
Ceded Reinsurance We believe our reinsurance agreements help us achieve important goals for our business, including risk management, capital efficiency, and greater predictability in our earnings in the event of unexpected significant fluctuations in our Medical Loss Ratio ("MLR").
We estimate that had we not had any quota share reinsurance arrangements in place, the insurance subsidiaries would have been required to hold approximately $446.8 million of additional capital as of December 31, 2022, which Parent would have been required to fund.
We estimate that had we not had any quota share reinsurance arrangements in place, the insurance subsidiaries would have been required to hold approximately $447.1 million and $446.8 million of additional capital as of December 31, 2023 and 2022 , respectively, which Parent would have been required to fund.
The combined statutory capital and surplus of our health insurance subsidiaries was $701.5 million and $474.8 million at December 31, 2022 and December 31, 2021, respectively, which was in compliance with and in excess of the minimum capital requirements for each period. The health insurance subsidiaries historically have required capital contributions from Parent to maintain minimum levels.
The combined statutory capital and surplus of our health insurance subsidiaries was $800.6 million and $701.5 million at December 31, 2023 and December 31, 2022, respectively, which was in compliance with and in excess of the minimum capital requirements for each period. The health insurance subsidiaries historically have required capital contributions from Parent to maintain minimum levels.
Risk Adjustment The risk adjustment programs in the Individual, Small Group, and Medicare Advantage markets we serve are administered federally by Centers for Medicare & Medicaid Services (“CMS”) and are designed to mitigate the potential impact of adverse selection and provide stability for health insurers.
Schlosser continues to serve as a member of the Company’s Board. Risk Adjustment The risk adjustment programs in the individual, small group, and Medicare Advantage markets we serve are administered federally by Centers for Medicare & Medicaid Services (“CMS”) and are designed to mitigate the potential impact of adverse selection and provide stability for health insurers.
Year Ended December 31, 2022 2021 Medical Loss Ratio 85.3 % 88.9 % InsuranceCo Administrative Expense Ratio 20.6 % 21.8 % InsuranceCo Combined Ratio 105.8 % 110.7 % The InsuranceCo Combined Ratio improved for the year ended December 31, 2022 as compared to the year ended December 31, 2021, consistent with the improvement in the MLR and InsuranceCo Administrative Expense Ratio. 59 Table of Contents 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, including quota share reinsurance premiums ceded and excluding excess of loss reinsurance premiums ceded and non-recurring items (“Adjusted Total Revenue”).
Year Ended December 31, 2023 2022 Medical Loss Ratio 81.6 % 85.3 % InsuranceCo Administrative Expense Ratio 17.9 % 20.6 % InsuranceCo Combined Ratio 99.5 % 105.8 % The InsuranceCo Combined Ratio improved for the year ended December 31, 2023 as compared to the year ended December 31, 2022, consistent with the improvement in the MLR and InsuranceCo Administrative Expense Ratio. 59 Table of Contents 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”).
Other significant accounting policies such as reinsurance, premium deficiency reserve, risk adjustment, stock-based compensation, and income taxes do not involve significant levels of uncertainty and are disclosed in Item 8, Financial Statements and Supplementary Data in this Annual Report on Form 10-K.
Other accounting policies such as reinsurance, premium deficiency reserve, current expected credit loss allowance (“CECL”), stock-based compensation, and income taxes do not involve significant levels of uncertainty and are disclosed in Item 8, Financial Statements and Supplementary Data in this Annual Report on Form 10-K.
Investment Income and Other Revenue Investment income (loss) and other revenue primarily includes interest earned and gains on our investment portfolio, along with sublease income. 61 Table of Contents Claims Incurred, Net Claims incurred, net primarily consists of both paid and unpaid medical expenses incurred to provide medical services and products to our members.
Investment Income and Other Revenue Investment income and other revenue primarily includes interest earned and gains on our investment portfolio, along with miscellaneous sources of revenue. Claims Incurred, Net Claims incurred, net primarily consists of both paid and unpaid medical expenses incurred to provide medical services and products to our members.
Assuming a hypothetical 1% difference between our December 31, 2022 estimates of benefits payable and actual benefits payable, excluding any potential offsetting impact from premium rebates, net earnings for the year ended December 31, 2022 would have increased by approximately $83.3 million or decreased by approximately $78.8 million.
Assuming a hypothetical 1% difference between our December 31, 2023 estimates of benefits payable and actual benefits payable, excluding any potential offsetting impact from premium rebates, net earnings for the year ended December 31, 2023 would have increased by approximately $116 million or decreased by approximately $109.5 million.
The Revolving Credit Facility is guaranteed by Oscar Management Corporation (formerly Mulberry Management Corporation) and Oscar Management Corporation of Florida, each wholly owned subsidiaries of Oscar, and all of our future direct and indirect subsidiaries (subject to certain permitted exceptions, including exceptions for guarantees that would require material governmental consents or in respect of joint venture) (the "Guarantors").
The Revolving Credit Facility is guaranteed by Oscar Management Corporation, a wholly owned subsidiary of Oscar, and all of our future direct and indirect subsidiaries (in each case, subject to certain permitted exceptions, including exceptions for guarantees (i) that would require material governmental consents or (ii) in respect of joint ventures) (the "Guarantors").
The incurrence of any such incremental Revolving Credit Facility will be subject to the following conditions measured at the time of incurrence of such commitments: (i) no default or event of default, (ii) all representations and warranties must be true and correct in all material respects immediately prior to, and after giving effect to, the incurrence of such incremental Revolving Credit Facility and (iii) and any such conditions as agreed between the Borrower and the lender providing such incremental commitment.
The incurrence of any such incremental Revolving Credit Facility will be subject to the following conditions measured at the time of incurrence of such commitments: (i) no default or event of default, (ii) all representations and warranties must be true and correct in all material respects immediately prior to, and after giving effect to, the incurrence of such incremental Revolving Credit Facility, (iii) pro forma liquidity (as defined in the Revolving Credit Facility) of no less than $50 million less than the pro forma aggregate commitments after giving effect to the increase in commitments, and (iv) other conditions as agreed between the Borrower and the lender providing such incremental commitment.
Income Tax (Benefit) Provision Our effective tax rate for the year ended December 31, 2022 and December 31, 2021 was approximately 0.09% and (0.15)%, respectively. Liquidity and Capital Resources Overview We maintain liquidity at two levels of our corporate structure, through our health insurance subsidiaries and through Holdco, our consolidated subsidiaries excluding our regulated insurance subsidiaries.
Income Tax Expense (Benefit) Our effective tax rate for the year ended December 31, 2023 and December 31, 2022 was approximately (1.23%) and 0.09%, respectively. 64 Table of Contents Liquidity and Capital Resources Overview We maintain liquidity at two levels of our corporate structure, through our health insurance subsidiaries and through Holdco, our consolidated subsidiaries excluding our regulated insurance subsidiaries.
Management also views Direct and Assumed Policy Premiums as a key operating metric because each of our MLR, InsuranceCo Administrative Expense Ratio, InsuranceCo Combined Ratio and Adjusted Administrative Expense Ratio are calculated on the basis of Direct and Assumed Policy Premiums.
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.
GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities and disclosure of contingent assets and liabilities in our financial statements. We regularly assess these estimates; however, actual amounts could differ from those estimates.
GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities and disclosure of contingent assets and liabilities in our financial statements. We regularly assess these estimates; however, actual amounts could differ from those estimates. The most significant items involving management’s estimates include estimates of benefits payable and risk adjustment.
Under our XOL reinsurance contracts in 2022, the reinsurer is paid to cover claims related losses over a $750,000 attachment point, but the amount of the attachment point may change year over year based on a variety of factors.
Under our XOL reinsurance contracts in 2023 and 2022, the reinsurer is paid to cover claims related losses over an attachment point of $1.5 million and $0.75 million, respectively, but the amount of the attachment point may change year over year based on a variety of factors.
Our investment policies are designed to provide liquidity, preserve capital, and maximize total return on invested assets, all in a manner consistent with state requirements that prescribe the types of instruments in which our subsidiaries may invest. These investment policies require that our investments have final maturities of a maximum of three years from the settlement date.
Our investment policies are designed to provide liquidity, preserve capital, and maximize total return on invested assets, all in a manner consistent with state requirements that prescribe the types of instruments in which our subsidiaries may invest. 67 Table of Contents These investment policies require that our investments of U.S.
Some of our payments and receipts, including loss settlements and subsequent reinsurance receipts, can be significant. Therefore, their timing can influence cash flows from operating activities in any given period.
The timing of our cash flows from operating activities can also vary among periods due to the timing of payments made or received. Some of our payments and receipts, including loss settlements and subsequent reinsurance receipts, can be significant. Therefore, their timing can influence cash flows from operating activities in any given period.
Furthermore, there is additional uncertainty for blocks of business that experience high growth compounded by the lack of credible experience data on the newly enrolling population. Actual risk adjustment calculations and transfers could materially differ from our assumptions. Impact of COVID-19 The COVID-19 pandemic continues to evolve and have an impact on our business.
Furthermore, there is additional uncertainty for both markets and blocks of business that experience outsized growth compounded by the lack of credible experience data on the newly enrolling population. Actual risk adjustment calculations and transfers could materially differ from our assumptions.
Each quota share reinsurance agreement includes a ceding commission payment from the reinsurer to Oscar to cover administrative costs. To the extent ceded premiums exceed ceded claims and commissions, we typically receive an experience refund.
Each quota share reinsurance agreement includes a ceding commission payment from the reinsurer to Oscar to cover administrative costs. To the extent ceded premiums exceed ceded claims and commissions, we typically receive an experience refund. We currently have quota share reinsurance arrangements with more than one counterparty with multiple state-level treaties.
If regulators do not approve our reinsurance agreements for this purpose, or if we cannot negotiate renewals of our quota share arrangements on acceptable terms, or at all, enter into new agreements with reinsurers, or otherwise obtain capital through debt or equity financings, our capital position would be negatively impacted, and we could fall out of compliance with applicable regulatory requirements” and “Risk Factors – Risks Most Material to Us – Our business, financial condition, and results of operations may be harmed if we fail to execute our growth strategy and manage our growth effectively.” Short-Term Cash Requirements The majority of the assets held by Holdco are in the form of cash and cash equivalents and investments.
If regulators do not approve our reinsurance agreements for this purpose, or if we cannot negotiate renewals of our quota share arrangements on acceptable terms, or at all, enter into new agreements with reinsurers, or otherwise obtain capital through debt or equity financings, our capital position would be negatively impacted, and we could fall out of compliance with applicable regulatory requirements” and “Risk Factors — Risks Most Material to Us — Our business, financial condition, and results of operations may be harmed if we fail to execute our strategy and manage our growth effectively.” Short-Term Cash Requirements The Company’s cash requirements within the next twelve months include benefits payable, risk adjustment transfer payable, current lease liabilities, interest payment of long-term debt, other current liabilities and purchase commitments and other obligations.
Such functions include, but are not limited to, member concierge services, claims processing, utilization management, and related health plan operations, actuarial, compliance and portions of information systems, legal and finance. This line item also includes ceding commissions we receive from our reinsurance partners, net of the impact of deposit accounting.
Such functions include, but are not limited to, member concierge services, claims processing, utilization management, and related health plan operations, actuarial, compliance and portions of information systems, legal and finance. This line item also includes the impact of deposit accounting, as well as ceding commissions related to quota share agreements accounted for under reinsurance accounting that are in runoff.
Under XOL reinsurance, the reinsurer agrees to assume all or a portion of the ceding company’s losses in excess of a specified amount. The premium payable to the reinsurer is negotiated by the parties based on losses on an individual member in a given calendar year and their assessment of the amount of risk being ceded to the reinsurer.
The premium payable to the reinsurer is negotiated by the parties based on losses on an individual member in a given calendar year and their assessment of the amount of risk being ceded to the reinsurer.
See Note 15 – Long-Term Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further detail of our obligations and the timing of future payments. • Noncontrolling interests.
See Note 15 – Long-Term Debt to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for further detail of our obligations and the timing of future payments. We expect the cash required to meet our long-term obligations to be primarily generated through future cash flows from operations.
Plans with lower than average risk scores will generally pay into the pool, while plans with higher than average risk scores will generally receive distributions. In the Medicare Advantage risk adjustment program, each member is assigned a risk score that reflects the member’s predicted health costs compared to an average member.
In the Medicare Advantage risk adjustment program, each member is assigned a risk score that reflects the member’s predicted health costs compared to an average member. Plans receive higher payments for members with higher risk scores than members with lower risk scores. 70 Table of Contents
As of December 31, 2022, there were no outstanding borrowings under the Revolving Credit Facility. 66 Table of Contents Interest Rate, Commitment Fees The interest rate applicable to borrowings under our Revolving Credit Facility is determined as follows, at our option: (a) a rate per annum equal to an adjusted London Inter-bank Offered Rate (“LIBOR”), plus an applicable margin of 4.50% (LIBOR is calculated based on one-, three- or six-month LIBOR, or such other period as agreed by all relevant Lenders, which is determined by reference to ICE Benchmark Administration Limited, but not less than 1.00%), or (b) a rate per annum equal to the Alternate Base Rate plus the applicable margin of 3.50% (the “Alternate Base Rate” is equal to the highest of (i) the prime rate, (ii) the federal funds effective rate plus 0.50%, and (iii) LIBOR based on a one-month interest period, plus 1.00%).
Interest Rate, Commitment Fees The interest rate applicable to borrowings under our Revolving Credit Facility is determined as follows, at our option: (a) a rate per annum equal to an adjusted term secured overnight financing rate (“SOFR”) plus an applicable margin of 4.50% (SOFR is calculated based on one-, three- or six-month SOFR, or such other period as agreed by all relevant Lenders, which is determined by reference to the SOFR administrator’s website, but not less than 1.00%), or (b) a rate per annum equal to the Alternate Base Rate, as defined in the Revolving Credit Facility, plus the applicable margin of 3.50% (the Alternate Base Rate is equal to the highest of (i) the prime rate, (ii) the federal funds effective rate plus 0.50%, and (iii) SOFR based on a one-month interest period, plus 1.00%).
We believe this ratio best represents the core performance of the consolidated insurance business, prior to the impact of quota share and net investment income.
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.
Medical claims are total medical expenses incurred by members in order to utilize health care services less any member cost sharing. These services include inpatient, outpatient, pharmacy, and physician costs. Medical claims 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.
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.
Year Ended December 31, 2022 2021 (in thousands) Direct claims incurred before ceded reinsurance (1) $ 4,428,000 $ 2,403,108 Assumed reinsurance claims 143,147 21,656 Excess of loss ceded claims (2) (18,632) (12,500) State reinsurance (3) (30,544) (14,655) Net claims before ceded quota share reinsurance (A) $ 4,521,971 $ 2,397,609 Premiums before ceded reinsurance (4) $ 5,334,520 $ 2,712,988 Excess of loss reinsurance premiums (5) (31,502) (16,266) Net premiums before ceded quota share reinsurance (B) $ 5,303,018 $ 2,696,722 Medical Loss Ratio (A divided by B) 85.3 % 88.9 % (1) See Note 4 - Reinsurance to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a reconciliation of direct claims incurred to claims incurred, net appearing on the face of our statement of operations.
Year Ended December 31, (in thousands, except percentages) 2023 2022 Direct claims incurred before ceded reinsurance (1) $ 4,459,702 $ 4,428,000 Assumed reinsurance claims 227,058 143,147 Excess of loss ceded claims (2) (3,117) (18,632) State reinsurance (3) (43,676) (30,544) Net claims before ceded quota share reinsurance (A) $ 4,639,967 $ 4,521,971 Premiums before ceded reinsurance (4) $ 5,696,978 $ 5,334,520 Excess of loss reinsurance premiums (5) (8,698) (31,502) Net premiums before ceded quota share reinsurance (B) $ 5,688,280 $ 5,303,018 Medical Loss Ratio (A divided by B) 81.6 % 85.3 % (1) See Note 4 - Reinsurance to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for a reconciliation of direct claims incurred to claims incurred, net appearing on the face of our statement of operations.
We believe MLR is an important metric to demonstrate the ratio of our costs to pay for health care of our members to the premiums before ceded reinsurance. MLRs in our existing products are subject to various federal and state minimum requirements. Below is a calculation of our MLR for the periods indicated.
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.
Year Ended December 31, 2022 2021 (in thousands) Other insurance costs $ 706,439 $ 410,363 Impact of quota share reinsurance (1) 154,741 82,246 Stock-based compensation expense (51,495) (42,295) Federal and state assessment of health insurance subsidiaries 281,049 138,369 Health insurance subsidiary adjusted administrative expenses (A) $ 1,090,734 $ 588,683 Premiums before ceded reinsurance (2) $ 5,334,520 $ 2,712,988 Excess of loss reinsurance premiums (31,502) (16,266) Net premiums before ceded quota share reinsurance (B) $ 5,303,018 $ 2,696,722 InsuranceCo Administrative Expense Ratio (A divided by B) 20.6 % 21.8 % (1) Includes ceding commissions received from reinsurers, net of the impact of deposit accounting of $(7,205) for the year ended December 31, 2022.
Year Ended December 31, (in thousands, except percentages) 2023 2022 Other insurance costs $ 824,457 $ 706,439 Impact of quota share reinsurance (1) (30,454) 154,741 Stock-based compensation expense (66,060) (51,495) Federal and state assessment of health insurance subsidiaries 289,647 281,049 Health insurance subsidiary adjusted administrative expenses (A) $ 1,017,590 $ 1,090,734 Premiums before ceded reinsurance (2) $ 5,696,978 $ 5,334,520 Excess of loss reinsurance premiums (8,698) (31,502) Net premiums before ceded quota share reinsurance (B) $ 5,688,280 $ 5,303,018 InsuranceCo Administrative Expense Ratio (A divided by B) 17.9 % 20.6 % (1) Includes ceding commissions received from reinsurers, net of the impact of deposit accounting of $(29,451) and $(7,205) for the year ended December 31, 2023 and 2022, respectively.
The Company estimates the receivable or payable under the risk adjustment programs based on its estimated risk score compared to the state average risk score. The Company may record a receivable or payable as an adjustment to premium revenues to reflect the year-to-date impact of the risk adjustment based on its best estimate.
The Company may record a receivable or payable as an adjustment to premium revenues to reflect the year-to-date impact of the risk adjustment based on its best estimate. The Company refines its estimate as new information becomes available.
Furthermore, reductions in the amount of premiums ceded under quota share reinsurance arrangements may result in an increase to our minimum capital and surplus requirements, and an increase in corresponding capital contributions by Holdco to our health insurance subsidiaries. 54 Table of Contents The Company currently has quota share reinsurance arrangements with more than one counterparty with multiple state-level treaties.
Reductions in the amount of premiums ceded under quota share reinsurance arrangements may result in an increase to our minimum capital and surplus requirements, and an increase in corresponding capital contributions by Holdco to our health insurance subsidiaries.
The decrease was primarily due to net proceeds received from the sale of common stock during our IPO in March 2021, slightly offset by net proceeds received from the issuance of convertible notes in February 2022. Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with U.S.
The decrease was primarily due to net proceeds received from the issuance of convertible senior notes due 2031 in February 2022. 68 Table of Contents Critical Accounting Policies and Estimates The preparation of Consolidated Financial Statements in conformity with U.S.
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. Adjusted Administrative Expenses exclude insurance-based expenses, non-cash expenses and non-recurring expenses.
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.
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. 60 Table of Contents 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.
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. 60 Table of Contents By providing this non-GAAP financial measure, together with a reconciliation to the most comparable U.S.
A commitment fee of 0.50% per annum is payable under our Revolving Credit Facility on the actual daily unused portions of the Revolving Credit Facility. The Revolving Credit Facility also contains LIBOR replacement provisions in the event LIBOR becomes unavailable during the term of this facility.
A commitment fee of 0.50% per annum is payable under our Revolving Credit Facility on the actual daily unused portions of the Revolving Credit Facility.
Payments into the risk adjustment program are made annually in the third quarter. We expect the cash required to meet these obligations to be primarily funded by cash available for general corporate use, funds primarily generated through equity or debt financing transactions, cash flows from current operations, and/or the realization of current assets, such as accounts receivable.
We expect the cash required to meet these obligations to be primarily funded by cash available for general corporate use, cash flows from current operations, and/or the realization of current assets, such as accounts receivable.
For additional information on the steps we’ve taken to balance growth and our capital position, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments, Trends and Other Factors Impacting Performance—Regulatory Update.” In the future, when our health insurance subsidiaries become profitable or if their levels of reserves and capital become excessive, we may make requests for dividends and distributions from our subsidiaries to fund our operations, which may or may not be approved by our regulators.
For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments, Trends and Other Factors Impacting Performance—Regulatory Update.” As our health insurance subsidiaries have become profitable, or as some become profitable in the future, or if their levels of statutory capital and surplus exceed minimum regulatory requirements, we may make periodic requests for dividends and distributions from our subsidiaries to fund our operations, or seek to enter into transactions or structures that enable us to efficiently deploy this excess capital, which may or may not be approved by our regulators.
As of December 31, 2022 and December 31, 2021, total cash and cash equivalents and investments held by Holdco was $342.0 million and $738.6 million, respectively, of which $9.8 million and $11.0 million was restricted for 2022 and 2021, respectively.
The majority of the assets held by Holdco are in the form of cash and cash equivalents and investments. As of December 31, 2023 and December 31, 2022, total cash and cash equivalents and investments held by Holdco was $233.5 million and $342.0 million, respectively, of which $12.6 million and $9.8 million was restricted 2023 and 2022, respectively.
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.
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.
Year Ended December 31, 2022 2021 (in thousands) Net loss $ (609,552) $ (571,426) Interest expense 22,623 4,720 Other expense (income) (2,415) 1,201 Income tax expense (benefit) (523) 846 Depreciation and amortization 15,283 14,605 Stock-based compensation/warrant expense (1) 112,329 99,152 Other non-recurring items (2) — 21,076 Adjusted EBITDA $ (462,255) $ (429,826) (1) Represents (i) 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, (ii) warrant contract expense, and (iii) changes in the fair value of warrant liabilities.
Year Ended December 31, (in thousands) 2023 2022 Net loss $ (270,594) $ (609,552) Interest expense 24,603 22,623 Other expenses (income) 7,082 (2,415) Income tax expense (benefit) 3,294 (523) Depreciation and amortization 30,694 15,283 Stock-based compensation (1) 159,683 112,329 Adjusted EBITDA $ (45,238) $ (462,255) (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.
We reevaluate our risk transfer estimates as new information and market data becomes available until we receive the final reporting from CMS in later periods, up to twelve months in arrears.
We reevaluate our risk transfer estimates as new information and market data becomes available until we receive the final reporting from CMS in later periods, up to twelve months in arrears. 54 Table of Contents Our risk transfer estimates are subject to a high degree of estimation and variability, and are affected by the relative risk of our members, and in the case of ACA, relative to that of other insurers.
These expenses include variable expenses paid to vendors and distribution partners, premium taxes and healthcare exchange fees, employee-related compensation, benefits, marketing costs, and other administrative expenses. The numerator and denominator in the calculation below reflect an adjustment to remove the impact of the Company’s quota share arrangements.
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.
As of December 31, 2022 and December 31, 2021, total cash and cash equivalents and investments held by our health insurance subsidiaries was $2.9 billion and $1.8 billion, respectively, of which $17.7 million and $17.0 million, respectively, was on deposit with regulators as required for statutory licensing purposes and are classified as restricted deposits on the balance sheet. 64 Table of Contents Our health insurance subsidiaries’ states of domicile have statutory minimum capital requirements that are intended to measure capital adequacy, taking into account the risk characteristics of an insurer’s investments and products.
As of December 31, 2023 and December 31, 2022, total cash and cash equivalents and investments held by our health insurance subsidiaries was $2.7 billion and $2.9 billion, respectively, of which $17.3 million and $17.7 million, respectively, was on deposit with regulators as required for statutory licensing purposes and are classified as restricted deposits on the balance sheet.
By providing this non-GAAP financial measure, together with a reconciliation to the most comparable U.S. GAAP measure, 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.
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.
In addition, the Revolving Credit Facility contains financial covenants that require us to (i) maintain specified levels of direct policy premiums (as defined in the Revolving Credit Facility) for each fiscal quarter, (ii) maintain a minimum liquidity (as defined in the Revolving Credit Facility) of $150 million (or $200 million if the liquidity decreased by a specified amount over the prior six month period) as of the last day of each quarter, and (iii) not exceed a maximum combined ratio (as defined in the Revolving Credit Facility) of 108% for fiscal year 2022 and 102% for fiscal year 2023, in each case, as of the last day of each quarter.
In addition, the Revolving Credit Facility contains financial covenants that require us to (i) maintain specified levels of direct policy premiums (as defined in the Revolving Credit Facility) for each fiscal quarter, (ii) maintain a minimum liquidity (as defined in the Revolving Credit Facility) of $50 million less than the aggregate commitments under the Revolving Credit Facility as of the last day of each fiscal quarter or, if the Revolving Credit Facility is drawn by more than 60%, as of the last day of any fiscal month, (iii) not exceed a maximum medical loss ratio (as defined in the Revolving Credit Facility) as of the last day of each quarter, and (iv) maintain minimum consolidated Adjusted EBITDA (as defined in the Revolving Credit Facility) as of the last day of each fiscal quarter.
Reinsurance premiums ceded are recognized over the reinsurance contract period in proportion to the period of risk covered. The volume of our reinsurance premiums ceded is impacted by the level of our premiums earned and any decision we make to increase or decrease limits, retention levels, and co-participations.
The volume of our reinsurance premiums ceded is impacted by the level of our premiums earned and any decision we make to increase or decrease limits, retention levels, and co-participations. Administrative Services Revenue Administrative services revenue includes revenue earned from services performed as part of the +Oscar platform.
Financial Results Summary Year Ended December 31, 2022 2021 (in thousands) Premiums before ceded reinsurance $ 5,334,520 $ 2,712,988 Reinsurance premiums ceded (1,463,403) (881,968) Premiums earned $ 3,871,117 $ 1,831,020 Total revenue $ 3,963,638 $ 1,838,715 Total operating expenses $ 4,553,505 $ 2,383,196 Net loss $ (609,552) $ (571,426) Key Operating and Non-GAAP Financial Metrics Year Ended December 31, 2022 2021 Members (as of December 31st) 1,151,483 598,169 Direct and Assumed Policy Premiums (in thousands) $ 6,842,439 $ 3,436,626 Medical Loss Ratio 85.3 % 88.9 % InsuranceCo Administrative Expense Ratio 20.6 % 21.8 % InsuranceCo Combined Ratio 105.8 % 110.7 % Adjusted Administrative Expense Ratio 24.6 % 28.9 % Adjusted EBITDA (1) (in thousands) $ (462,255) $ (429,826) (1) Adjusted EBITDA is a non-GAAP measure.
Financial Results Summary Year Ended December 31, (in thousands) 2023 2022 Premiums before ceded reinsurance $ 5,696,978 $ 5,334,520 Reinsurance premiums ceded (10,909) (1,463,403) Premiums earned $ 5,686,069 $ 3,871,117 Total revenue $ 5,862,869 $ 3,963,638 Total operating expenses $ 6,098,484 $ 4,553,505 Net loss $ (270,594) $ (609,552) Key Operating and Non-GAAP Financial Metrics Year Ended December 31, (in thousands, except percentages and members) 2023 2022 Members 1,036,283 1,151,483 Direct and Assumed Policy Premiums $ 6,647,658 $ 6,842,439 Medical Loss Ratio 81.6 % 85.3 % InsuranceCo Administrative Expense Ratio 17.9 % 20.6 % InsuranceCo Combined Ratio 99.5 % 105.8 % Adjusted Administrative Expense Ratio 21.0 % 24.6 % Adjusted EBITDA (1) $ (45,238) $ (462,255) (1) Adjusted EBITDA is a non-GAAP measure.
Year Ended December 31, 2022 2021 (in thousands) Total Operating Expenses $ 4,553,505 $ 2,383,196 Claims incurred, net (3,280,798) (1,623,995) Premium deficiency reserve release 25,033 55,325 Impact of quota share reinsurance (1) 154,741 82,246 Total Administrative Expenses $ 1,452,481 $ 896,772 Stock-based compensation expense/warrant expense (112,329) (99,152) Depreciation and amortization (15,283) (14,605) Other non-recurring items (2) — (898) Adjusted Administrative Expenses (A) $ 1,324,869 $ 782,117 Total Revenue $ 3,963,638 $ 1,838,715 Reinsurance premiums ceded 1,463,403 881,968 Excess of loss reinsurance premiums (31,502) (16,266) Adjusted Total Revenue (B) $ 5,395,539 $ 2,704,417 Adjusted Administrative Expense Ratio (A divided by B) 24.6 % 28.9 % (1) Includes ceding commissions received from reinsurers, net of the impact of deposit accounting of $(7,205) for the year ended December 31, 2022.
Year Ended December 31, (in thousands, except percentages) 2023 2022 Total Operating Expenses $ 6,098,484 $ 4,553,505 Claims incurred, net (4,642,024) (3,280,798) Premium deficiency reserve (release) (1,562) 25,033 Impact of quota share reinsurance (1) (30,454) 154,741 Total Administrative Expenses $ 1,424,444 $ 1,452,481 Stock-based compensation expense (159,683) (112,329) Depreciation and amortization (30,694) (15,283) Adjusted Administrative Expenses (A) $ 1,234,067 $ 1,324,869 Total Revenue $ 5,862,869 $ 3,963,638 Reinsurance premiums ceded 10,909 1,463,403 Excess of loss reinsurance premiums (8,698) (31,502) Adjusted Total Revenue (B) $ 5,865,080 $ 5,395,539 Adjusted Administrative Expense Ratio (A divided by B) 21.0 % 24.6 % (1) Includes ceding commissions received from reinsurers, net of the impact of deposit accounting of $(29,451) and $(7,205) for the year ended December 31, 2023 and 2022, respectively.
Based on our current forecast, we believe the cash, and cash equivalents and investments held by Holdco, not including restricted cash, will be sufficient to fund our operating requirements for at least the next twelve months.
Based on our current forecast, we believe the Company's cash, and cash equivalents and investments, not including restricted cash, will be sufficient to fund our operating requirements for at least the next twelve months. Our cash flows used in operations may differ substantially from our net loss due to non-cash charges or due to changes in balance sheet accounts.
The change was due to the lower premium deficiency reserve established at the end of 2021 as compared to the reserve established at the end of 2020 as well as the lower premium deficiency reserve established at the end of 2022 as compared to the reserve established at the end of 2021.
The change was due to slightly higher premium deficiency reserves in our assumed business established at the end of 2023 as compared to the reserve established at the end of 2022.
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022. Overview Oscar is the first health insurance company built around a full stack technology platform and a relentless focus on serving our members.
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 24, 2023.
It is anticipated that the extension of the APTCs, the "family glitch" fix, and Medicaid redeterminations could lead to significant growth in the ACA marketplace. As a result of the changing market dynamics following IFP market exits by certain carriers, the Company proactively engaged its regulators regarding options to manage its membership growth.
Regulatory Update As a result of the changing market dynamics following market exits by certain carriers in 2022, the Company proactively engaged its regulators regarding options to manage its membership growth.
The Company may determine in the future to repurchase portions of the outstanding 2031 Notes from time to time in accordance with applicable SEC and other legal requirements and in consideration of market and other conditions. See Note 15 - Long-Term Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
The Company may determine in the future to repurchase portions of the outstanding 2031 Notes from time to time in accordance with applicable SEC and other legal requirements and in consideration of market and other conditions.
The Company refines its estimate as new information becomes available. Under the Individual and Small Group risk adjustment program, each plan is assigned a risk score based upon demographic information and current year claims information related to its members.
Under the individual and small group risk adjustment program, each plan is assigned a risk score based upon demographic information and current year claims information related to its members. Plans with lower than average risk scores will generally pay into the pool, while plans with higher than average risk scores will generally receive distributions.
For further information, see “Risk Factors — Risks Most Material to Us – Our business, financial condition, and results of operations may be harmed if we fail to execute our growth strategy and manage our growth effectively.” 56 Table of Contents Financial Results Summary and 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 have added three new clients in our launch year. 56 Table of Contents Financial Results Summary and 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.
Adjusted EBITDA Adjusted EBITDA is defined as net 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, warrant contract expense, changes in the fair value of warrant liabilities, and other non-recurring items as described below.
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.
For more detail related to our medical claims expenses, see Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 69 Table of Contents Risk Adjustment The risk adjustment programs in the Individual, Small Group, and Medicare Advantage markets we serve are designed to mitigate the potential impact of adverse selection and provide stability for health insurers.
For more detail related to our medical claims expenses, see Note 2 - Summary of Significant Accounting Policies to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
Federal and State Assessments Federal and state assessments increased $142.4 million, or 102%, to $281.5 million for the year ended December 31, 2022, from $139.1 million for the year ended December 31, 2021, which was primarily due to membership growth.
Federal and State Assessments Federal and state assessments increased by $9.2 million, or 3%, to $290.7 million for the year ended December 31, 2023, from $281.5 million for the year ended December 31, 2022, which was primarily due to higher premiums before ceded reinsurance.
See “Adjusted EBITDA” below for a reconciliation to net loss, the most directly comparable U.S. GAAP measure, and for information regarding our use of Adjusted EBITDA. Members Members are defined as any individual covered by a health plan that we offer directly or through a co-branded arrangement.
See “Adjusted EBITDA” below for a reconciliation to net loss, the most directly comparable U.S. GAAP measure, and for information regarding our use of Adjusted EBITDA. Members We view the number of members enrolled in our health plans as an important metric to help evaluate and estimate revenue and market share.
The Company maintains cash and cash equivalents and investments on deposit or pledged to various state agencies as a condition for licensure. We classify our restricted deposits as long-term given the requirement to maintain such assets on deposit with regulators.
Our restricted investments are invested principally in cash and cash equivalents and U.S. treasury securities; we have the ability to hold such restricted investments until maturity. The Company maintains cash and cash equivalents and investments on deposit or pledged to various state agencies as a condition for licensure.
Due to strong Open Enrollment performance, the threshold was met and the Company temporarily stopped accepting new members in Florida in the fourth quarter of 2022; however, current members were still able to re-enroll.
Due to strong Open Enrollment performance, the threshold was met and the Company temporarily stopped accepting new members in Florida from December 13, 2022 through August 5, 2023. After the enrollment restriction was removed, the Company was able to accept new SEP members through December 31, 2023.
Investing Activities Net cash used in investing activities decreased $548.0 million to $226.5 million for the year ended December 31, 2022, compared to $774.5 million for the year ended December 31, 2021. The decrease was primarily due to lower purchases of investments in 2022 compared to 2021.
Investing Activities Net cash provided by (used in) investing activities increased $803.7 million to $577.2 million of cash provided by investing activities for the year ended December 31, 2023, compared to $226.5 million used for the year ended December 31, 2022.
For additional information see Risk Factors - Risk Related to our Business - If state regulators do not approve payments of dividends and distributions by our health insurance subsidiaries to us, we may not have sufficient funds to implement our business strategy.
For additional information see Part I, Item 1A “Risk Factors—Risks Related to our Business—If state regulators do not approve payments of dividends and distributions by our health insurance subsidiaries to us, or do not approve other capital efficiency structures we may pursue, we may not have sufficient funds to implement our business strategy.” 65 Table of Contents Our health insurance subsidiaries also utilize quota share reinsurance arrangements to meet our minimum capital and surplus requirements, which are designed to enable us to efficiently deploy capital to fund our growth.
Summary of Cash Flows Our cash flows used in operations may differ substantially from our net loss due to non-cash charges or due to changes in balance sheet accounts. The timing of our cash flows from operating activities can also vary among periods due to the timing of payments made or received.
We classify our restricted deposits as long-term given the requirement to maintain such assets on deposit with regulators. Summary of Cash Flows Our cash flows used in operations may differ substantially from our net loss due to non-cash charges or due to changes in balance sheet accounts.
In developing our benefits payable estimates, we apply different estimation methods depending on the month for which incurred claims are being estimated.
Healthcare costs in the years ended December 31, 2023 and December 31, 2022 included unfavorable healthcare claim development related to prior years of $19.8 million (net of reinsurance) and $1.3 million (net of reinsurance), respectively. In developing our benefits payable estimates, we apply different estimation methods depending on the month for which incurred claims are being estimated.
Our cash flows used in operations may differ substantially from our net loss due to non-cash charges or due to changes in balance sheet accounts. The timing of our cash flows from operating activities can also vary among periods due to the timing of payments made or received.
The timing of our cash flows from operating activities can also vary among periods due to the timing of payments made or received. Some of our payments and receipts, including risk adjustment and reinsurance receipts, can be significant.

… 83 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed2 unchanged
Biggest changeInterest Rate Risk We are subject to interest rate risk in connection with the fair value of our investment portfolio, which consists of U.S. Treasury and agency securities, corporate notes, certificates of deposit, commercial paper and municipalities. Our primary market risk exposure is changes to prime rate-based interest rates.
Biggest changeInterest Rate Risk We are subject to interest rate risk in connection with the fair value of our investment portfolio, which consists of U.S. Treasury and agency securities, corporate notes, and certificates of deposit. Our primary market risk exposure is driven by changes to prime rate-based interest rates.
Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors, and other factors beyond our control. Assuming a hypothetical and immediate 1% increase in interest rates at December 31, 2022, the fair value of our investments would decrease by approximately $8.5 million.
Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors, and other factors beyond our control. Assuming a hypothetical and immediate 1% increase in interest rates at December 31, 2023, the fair value of our investments would decrease by approximately $8.2 million.
Any declines in interest rates over time would reduce our investment income. 70 Table of Contents
Any declines in interest rates over time would reduce our investment income. 71 Table of Contents

Other OSCR 10-K year-over-year comparisons