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What changed in Oscar Health, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Oscar Health, Inc.'s 2023 and 2024 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 2024 report.

+469 added−485 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-15)

Top changes in Oscar Health, Inc.'s 2024 10-K

469 paragraphs added · 485 removed · 328 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

95 edited+45 added−39 removed66 unchanged
Biggest changeFor 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.
Biggest changeFor information on risks associated with our regulatory framework, see “Risk Factors—Most Material Risks to Us—Any changes to the ACA and its regulations could materially and adversely affect our business, results of operations, and financial condition; and Risk Factors—Risks Related to the Regulatory Framework that Governs Us.” 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; • monitor our network of contracted providers to ensure we meet specific state and/or federal quality, credentialing, availability and accessibility requirements on an ongoing basis and require regulatory assessment and approval annually as a condition of offering our products; • 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.
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.
We believe that our 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.
For information on risks associated with ACA and changes to ACA, see “Risk Factors—Most Material Risks to Us—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.” In general, the individual market risk pool that includes public Health Insurance Marketplaces has changed significantly since its inception in 2014 and continues to exhibit risk volatility.
For information on risks associated with ACA and changes to ACA, see “Risk Factors—Most Material Risks to Us—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.” In general, the individual market risk pool that includes Health Insurance Marketplaces has changed significantly since its inception in 2014 and continues to exhibit risk volatility.
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.
As portions of the healthcare system increasingly shift towards offering more selective networks, we believe the insurers that will thrive are those that 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 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.
It is the combination of all these factors—trust, engagement, 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.
Based on our experience in public Health Insurance Marketplaces to date, we have made adjustments to our premium rates and participation footprint, and we will continue to evaluate the performance of such products going forward. In addition, insurers have faced uncertainties related to federal government funding for various ACA programs.
Based on our experience in Health Insurance Marketplaces to date, we have made adjustments to our premium rates and participation footprint, and we will continue to evaluate the performance of such products going forward. In addition, insurers have faced uncertainties related to federal government funding for various ACA programs.
GAAP. Definitions under applicable MLR regulations also impact insurers differently depending upon their organizational structure or tax status, which could result in a competitive advantage to some insurance providers that may not be available to us, resulting in an uneven playing field in the industry.
Definitions under applicable MLR regulations also impact insurers differently depending upon their organizational structure or tax status, which could result in a competitive advantage to some insurance providers that may not be available to us, resulting in an uneven playing field in the industry.
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.
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 adequacy, contracting, product and rate, licensing and financial and reporting requirements.
Corporate Practice of Medicine and Fee-Splitting Laws Oscar Medical Group, which consists of physician-owned professional corporations, functions as a direct medical service provider and, as such, our arrangements with Oscar Medical Group are subject to additional laws and regulations.
Corporate Practice of Medicine and Fee-Splitting Laws Oscar Medical Group, which consists of four physician-owned professional corporations, functions as a direct medical service provider and, as such, our arrangements with Oscar Medical Group are subject to additional laws and regulations.
We offer Campaign Builder, an engagement and recommendation platform that leverages the wisdom from 10+ years of building the Oscar member experience. The platform delivers continuous care management by informing population identification and delivering personalized interactions with real time reporting and analytics to measure key outcomes and insights.
We offer Campaign Builder, an engagement and recommendation platform that leverages the wisdom from 12+ years of building the Oscar member experience. The platform delivers continuous care management by informing population identification and delivering personalized interactions with real time reporting and analytics to measure key outcomes and insights.
We offer health plans in the individual market on exchange and off-exchange under the five metal plan categories defined by the ACA: Catastrophic, Bronze, Silver, Gold, and Platinum. These plans differ based on the size of the monthly premium and the level of sharing of medical costs between Oscar and our members.
We offer health plans in the individual market under the five metal plan categories defined by the ACA: Catastrophic, Bronze, Silver, Gold, and Platinum. These plans differ based on the size of the monthly premium and the level of sharing of medical costs between Oscar and our members.
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.
These laws typically require increasing degrees of regulatory oversight and intervention if a company’s RBC declines below certain thresholds. As of December 31, 2024, the RBC levels of our insurance and HMO subsidiaries expect to meet or exceed all applicable mandatory RBC requirements.
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.
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.
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 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 and Google, to support our information technology systems.
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.
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.
While we anticipate continued changes with respect to the ACA, either through Congress, court challenges, executive actions, or administrative action, we expect the major portions of the ACA to remain in place and continue to significantly impact our business operations and results of operations, including pricing, minimum MLRs, the implementation of a risk adjustment program, and the geographies in which our products are available.
While we anticipate continued changes with respect to the ACA, either through Congress, court challenges, executive actions, or administrative action, we expect the major portions of the ACA to remain in place and continue to significantly impact our business operations and results of operations, including pricing, minimum MLRs, administration of the risk adjustment program, and the geographies in which our products are available.
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.
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.
These RBC requirements are intended to assess the capital adequacy of life and health insurers and HMOs, taking into account the risk characteristics of a company’s investments and products. In general, under these laws, an insurance company or HMO must submit a report of its RBC level to the insurance regulator of its state of domicile each calendar year.
These RBC requirements are intended to assess the capital adequacy of life and health insurers and HMOs, taking into account the risk characteristics of a company’s investments and products. In general, under these laws, an insurance company or HMO must submit a report of its RBC level to the insurance regulator of its state of domicile.
We compete directly and through independent intermediaries to enroll new and retain existing members and employer groups, as we currently derive substantially all of our revenue from direct policy premiums.
We compete directly and through independent intermediaries to enroll new and retain existing members , as we currently derive substantially all of our revenue from direct policy premiums.
Additionally, in 2017 the National Association of Insurance Commissioners (“NAIC”) adopted the Insurance Data Security Model Law, which established standards for data security and for the investigation and notification of insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain nonpublic information.
Additionally, in 2017 the National Association of 17 Table of Contents Insurance Commissioners (“NAIC”) adopted the Insurance Data Security Model Law, which established standards for data security and for the investigation and notification of insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain nonpublic information.
Some states permit insurers or HMOs to recover assessments paid through full or partial premium tax offsets, or through future policyholder surcharges. The amount and timing of any future assessments cannot be predicted with certainty; however, future assessments are likely to occur.
Some states permit insurers or HMOs to recover assessments paid through full or partial premium tax offsets, or through future policyholder surcharges. The amount and timing of any future assessments cannot be predicted with certainty; however, future assessments may occur.
As of 2021, quality rating information for QHPs is publicly displayed and accessible to consumers on all Health Insurance Marketplaces. • Federal regulations require premium rate increases to be reviewed for small group and individual products above specified thresholds that may be adjusted from time to time and enrollees to be notified of the premium rate increase in advance.
Quality rating information for QHPs is publicly displayed and accessible to consumers on all Health Insurance Marketplaces. • Federal regulations require premium rate increases to be reviewed for individual products above specified thresholds that may be adjusted from time to time and enrollees to be notified of the premium rate increase in advance.
In addition, certain of our businesses are also subject to 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. We rely on vendors to assist us with PCI matters and to maintain PCI compliance.
In addition, certain of our businesses are also subject to the Payment Card Industry Data Security Standard (“PCI-DSS”), which is a multifaceted security standard that is designed to protect credit card account data as mandated by PCI entities. We rely on vendors to assist us with PCI-DSS matters and to maintain PCI-DSS compliance.
Changes to our business environment are likely to continue as elected officials at the national and state levels continue to enact, and both elected officials and candidates for election continue to propose significant modifications to existing laws and regulations, including changes to taxes and fees.
Changes to our business environment are likely to continue as elected officials at the national and state levels continue to enact, and both elected officials and candidates for election continue to propose significant modifications to existing laws and regulations.
The ACA prohibits health insurers selling ACA-regulated plans in the individual and small group markets from using health status and gender in the determination of the insurance premium. In addition, age rating under the ACA is limited to a 3:1 ratio for adults age 21 and older, and tobacco use rating is limited to a 1.5:1 ratio.
The ACA prohibits health insurers selling ACA-regulated plans in the individual market from using health status and gender in the determination of the insurance premium. In addition, age rating under the ACA is limited to a 3:1 ratio for adults age 21 and older, and tobacco use rating is limited to a 1.5:1 ratio.
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.
As of December 31, 2024, 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 application (“app”), or web portal. However, our software and other proprietary information are protected by copyright on creation.
By leveraging Campaign Builder, our engagement and automation engine, we're able to rapidly create and iterate upon omnichannel member outreach programs to drive adherence to important clinical pathways.
By leveraging Campaign Builder, our engagement and automation engine, we are able to rapidly create and iterate upon omnichannel member outreach programs to drive adherence to important clinical pathways.
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 proportion of broker-acquired business increased in 2024 compared to 2023 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.
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.
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 in exchange for a corresponding percentage of premiums.
These laws permit the Department of Justice (“DOJ”), the HHS Office of Inspector General (“HHS-OIG”), CMS, and other enforcement authorities to institute a claim, action, investigation, or other proceeding against us for violations and, depending on the facts and circumstances, to seek treble damages, criminal, civil, or administrative fines, penalties, and assessments.
These laws permit the Department of Justice (“DOJ”), the HHS-OIG, CMS, and other enforcement authorities to institute a claim, action, investigation, or other proceeding against us for violations and, depending on the facts and circumstances, to seek treble damages, criminal, civil, or administrative fines, penalties, and assessments.
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.
We refer to this virtuous cycle as our member engagement engine. 8 Table of Contents Product features such as 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.
We believe that having a diverse employee base empowers our community, drives better business outcomes, and ultimately allows us to better serve our members. Internally, we aim to promote equity through a transparent, systematic approach to our human capital frameworks and operations.
We believe that having a varied and broad employee base empowers our community, drives better business outcomes, and ultimately allows us to better serve our members. Internally, we aim to promote a transparent, systematic approach to our human capital frameworks and operations.
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.
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, which we offered until the plan year 2024. The regulations, contractual requirements, and policies applicable to participants in government healthcare programs are complex and subject to change.
For example, New York state law requires an 82% MLR for both small group and individual products and plans. • The minimum MLR thresholds disclosed above are based on definitions of an MLR calculation provided by HHS, or specific states, as applicable, and differ from our calculation of MLR based on premium revenue and benefit expense as reported in accordance with U.S.
For example, New York state law requires an 82% MLR for individual products and plans. These minimum MLR thresholds are based on definitions of an MLR calculation provided by HHS, or specific states, as applicable, and differ from our calculation of MLR based on premium revenue and benefit expense as reported in accordance with U.S. GAAP.
Campaign Builder, our engagement and recommendation platform for providers and payors, leverages predictive analytics to identify high value opportunities for engagement and to deliver personalized interactions with real time reporting and analytics to measure key outcomes and insights. +Oscar currently serves approximately 500,000 client lives on its Campaign Builder platform, in addition to the approximately 1.3 million members enrolled in Oscar health insurance.
Campaign Builder, our engagement and recommendation platform for providers and payors, leverages predictive analytics to identify high value opportunities for engagement and to deliver personalized interactions with real time reporting and analytics to measure key outcomes and insights. +Oscar currently serves nearly 500,000 client lives on its Campaign Builder platform, in addition to the approximately 1.68 million members enrolled in Oscar health insurance, in each case as of December 31, 2024.
We announce material information to the public about us, our products and services, and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, webcasts and the investor relations section of our website in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligation under Regulation FD.
We announce material information to the public about us, our products and services, and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, webcasts and the investor relations section of our website in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligation under Regulation FD. 19 Table of Contents The information disclosed by the foregoing channels could be deemed to be material information.
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.
Some of the more significant ACA rules are described below: 15 Table of Contents • The minimum MLR threshold for the individual market, as defined by U.S. Department of Health and Human Services (“HHS”), is 80%. Certain states require us to meet more restrictive MLR thresholds.
We have employed various technology and process-based methods, such as network isolation, intrusion detection systems, vulnerability assessments, penetration testing, use of threat intelligence, content filtering, endpoint security (including anti-malware and detection response capabilities), email security mechanisms, and access control mechanisms. We also use encryption techniques for data at rest and in transit.
We have employed various technology and process-based methods, such as network isolation, intrusion detection systems, vulnerability assessments, penetration testing, use of threat intelligence, content filtering, endpoint security (including anti-malware and detection response capabilities), email security mechanisms, and access control mechanisms.
Our strategic priorities include: running a great company with market-leading, sustainable, scalable operations; continually investing in our superior member experience; harnessing our technology to power others; and continuing to innovate market offerings to extend beyond the ACA. HUMAN CAPITAL RESOURCES As of December 31, 2023, we had approximately 2,400 full-time employees.
Our strategic priorities include: running a great company with market-leading, sustainable, scalable operations; continually investing in our superior member experience; harnessing our technology to power others; and developing innovative market offerings to expand the individual market. HUMAN CAPITAL RESOURCES As of December 31, 2024, we had approximately 2,400 full-time employees.
We have invested in a benefits package designed to be comprehensive and affordable, providing protection and support to help our employees achieve health, financial, and wellness goals, including mental health, infertility support, and dependent care.
We have invested in a benefits package designed to be comprehensive and affordable, providing protection and support to help our employees achieve health, financial, and wellness goals, with services including mental health care, fertility support, and family-building benefits.
To carry out the above tasks, CMS and other agencies periodically examine our current and past business practices, accounts and other books and records, operations and performance of our health plans, compliance with contracts, adherence to governing rules and regulations, and the quality of care we provide to our members.
To carry out the above tasks, CMS, state insurance regulators and other agencies periodically examine our current and past business practices, accounts and other books and records, operations and performance of our health plans, compliance with contracts, adherence to governing rules and regulations and the quality of care we provide to our members, including the quality, credentialing, availability and accessibility of contracted network providers.
Similarly, in accordance with The National Association of Insurance Commissioners’ (“NAIC”) Risk Management and Own Risk Solvency Assessment Model Act, we must complete an annual “own risk and solvency assessment,” which is an internal assessment, appropriate to the nature, scale, and complexity of our company, of the material and relevant risks associated with the current business plan, and of the sufficiency of capital resources to support those risks.
Similarly, in accordance with The National Association of Insurance Commissioners’ (“NAIC”) Risk Management and Own Risk Solvency Assessment Model Act, we must complete an annual “own risk and solvency assessment,” which is an internal assessment, appropriate to the nature, scale, and complexity of our company, of the material and relevant risks associated with the current business plan, and of the sufficiency of capital resources to support those risks. 14 Table of Contents Ongoing Requirements and Changes to the ACA The ACA significantly changed the United States healthcare system.
Fraud, Waste and Abuse Laws and the False Claims Act Because we receive payments from federal governmental agencies, we are subject to various laws commonly referred to as “fraud, waste, and abuse” laws, including the federal Anti-Kickback Statute, the Stark Law, and the FCA.
Fraud, Waste and Abuse Laws and the False Claims Act Because we receive payments from federal governmental agencies, we may be subject to various laws commonly referred to as “fraud, waste, and abuse” laws, including the federal Anti-Kickback Statute, the Physician Self-Referral Law (“Stark Law”), and the FCA.
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.
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.
Oscar works to bring new and innovative insurance products to market, built to meet the healthcare needs of consumers as diverse as the communities in which they live. Oscar does this with an eye towards promoting health equity, affordability, and closing critical gaps in benefits for consumers.
Oscar works to bring new and innovative insurance products to market, built to meet the healthcare needs of consumers from various communities. Oscar does this with an eye towards promoting health outcomes, accessibility, affordability, and closing critical gaps in benefits for consumers.
We have built our own cloud-native technology platform, and we believe we are the only player with our claims, member-facing, and provider-facing systems. The technology platform is single-threaded, meaning it spans all critical healthcare insurance and technology domains, including member and provider data, utilization management, claims management, billing, and benefits.
We have built our own cloud-native single-threaded technology platform, meaning it spans all critical healthcare insurance and technology domains, including member and provider data, utilization management, claims management, billing, and benefits.
The California Consumer Privacy Act of 2018 (“CCPA”) and the California Privacy Rights Act of 2023 (“CPRA”) began a trend toward more stringent privacy legislation in the United States, and multiple states have enacted, or are expected to enact, similar laws, including the Oregon Consumer Privacy Law which takes effect on July 1, 2024, not all of which exempt insurance companies categorically. 18 Table of Contents Newer federal regulations requiring additional transparency could also materially impact our operations.
The California Consumer Privacy Act of 2018 (“CCPA”) and the California Privacy Rights Act of 2023 (“CPRA”) began a trend toward more stringent privacy legislation in the United States, and multiple states have enacted, or are expected to enact, similar laws, including the Oregon Consumer Privacy Law which took effect on July 1, 2024, not all of which exempt insurance companies categorically.
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.
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.
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 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 .
We foster a culture in which our employees share a common connection to our mission: they are passionate about making a frustrating healthcare system easier, more human, and better for everyone. These principles drive our core values: 1. What we do is a big deal. We’re solving problems that change and save lives 2. Powered by people. Members above all.
At Oscar, we are powered by people from varied and broad backgrounds, experiences, and industries. We foster a culture in which our employees share a common connection to our mission: they are passionate about making a frustrating healthcare system easier, more human, and better for everyone. These principles drive our core values: 1. What we do is a big deal.
The NBPP limits the number of non-standard plan options that QHP issuers may offer on the federal ACA marketplace to four per product network type, per metal level (excluding catastrophic plans), in any service area, for plan year 2024, and to two non-standard plans for plan year 2025 and subsequent plan years.
The NBPP for plan year 2025 was released on April 15, 2024, and the NBPP for plan year 2026 was issued on January 13, 2025. CMS limits the number of non-standard plan options that QHP issuers may offer on the federal ACA marketplace to two per product network type, per metal level (excluding catastrophic plans).
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.
Our 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.
Any updates to the list of disclosure channels through which we will announce information will be posted on the “Investor Relations” section of our website.
As such, we encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the “Investor Relations” section of our website.
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.
There are laws and regulations that set specific standards for, among other things, delivery of services, appeals, grievances, payment of claims, the quality, credentialing, availability and accessibility of contracted providers participating in our networks, fraud prevention, protection of consumer health information, pricing and underwriting practices, and covered benefits and services.
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.
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.
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.
We also use encryption techniques for data at rest and in transit. 12 Table of Contents 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.
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.
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 approximately 1.68 million effectuated members as of December 31, 2024. We offer coverage for individuals and families in 18 states.
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.
This includes wellness days, parental leave, and sabbatical leaves for more tenured employees. Inclusion and Belonging We recognize the importance of inclusion and belonging in the workplace, and we aim to embed efforts to foster an inclusive workplace across our full slate of human capital programming and operations.
In addition to the FCA, under the federal Civil Monetary Penalties Law, the HHS-OIG has the authority to impose civil penalties against any person who, among other things, knowingly presents, or causes to be presented, certain false or otherwise improper claims.
Health insurers are required to maintain compliance programs to prevent, detect, and remediate fraud, waste, and abuse, and are often the subject of fraud, waste, and abuse investigations and audits. 18 Table of Contents In addition to the FCA, under the federal Civil Monetary Penalties Law, the HHS-OIG has the authority to impose civil penalties against any person who, among other things, knowingly presents, or causes to be presented, certain false or otherwise improper claims.
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.
For the year ended December 31, 2024, $9,512.3 million and $799.3 million of premiums were earned directly from CMS and from our members, respectively. 6 Table of Contents Disaggregated membership information as of December 31, 2024 and 2023 is presented in the tables below: Membership by Offering As of December 31, 2024 2023 Individual and Small Group 1,636,400 967,002 Medicare Advantage — 1,781 Cigna+Oscar (1) 40,570 67,500 Total Members (2) 1,676,970 1,036,283 (1) Represents total membership for our co-branded partnership with Cigna.
The emergence of medical and pharmacy claims is influenced by the aforementioned drivers, and further mix shifts may continue to alter claims incurred patterns in future periods. Reinsurance We enter into reinsurance agreements to help us mitigate risk, which includes protecting capital and reducing earnings and cash flow volatility.
The emergence of medical and pharmacy claims is influenced by the aforementioned drivers, and further mix shifts may continue to alter claims incurred patterns in future periods. Reinsurance We believe our reinsurance agreements help us achieve important goals for our business, including risk management and capital efficiency.
Membership 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.
Membership by State As of December 31, 2024 2023 Florida 871,881 593,867 Georgia 379,680 117,189 Texas 141,000 112,554 Ohio 82,845 27,871 Tennessee 31,887 10,228 Iowa 26,767 10,344 Missouri 26,119 7,604 New Jersey 23,416 18,842 Arizona 14,386 16,783 Kansas 13,816 3,808 Oklahoma 12,153 20,352 Illinois 11,138 6,057 California 10,981 50,511 New York 10,902 14,021 Connecticut 7,658 19,660 North Carolina 5,403 780 Michigan 2,909 1,784 Pennsylvania 2,732 3,193 Nebraska 929 499 Virginia 368 336 Total 1,676,970 1,036,283 Seasonality Our business is generally affected by the seasonal patterns of our member enrollment, medical expenses, and health plan mix shift and policy design.
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.
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. In the case of federal and state-run reinsurance programs, no reinsurance premiums are paid.
COMPETITION We operate in a highly competitive environment in an industry subject to significant and ongoing changes, including business consolidations, new strategic alliances, market pressures, scientific and technological advances in medical care and therapeutics, as well as regulatory and legislative challenges and reform both at the federal and state level.
We bring our workforce together to help inform the initiatives of our Culturally Competent Care Program, which strives to provide care to members with various values, beliefs, and behaviors, including tailoring care delivery to meet members’ social, cultural, and linguistic needs. 10 Table of Contents COMPETITION We operate in a highly competitive environment in an industry subject to significant and ongoing changes, including business and hospital system consolidations, new strategic alliances, market pressures, scientific and technological advances in medical care and therapeutics, as well as regulatory and legislative challenges and reform both at the federal and state level.
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.
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.
Developing and growing others is what raises the bar. 3. No genius without grit. Be relentless. Be scrappy. Trying and failing beats not trying and changing nothing. 4. Seek the truth. But never assume you’ve found it. Be scientific. 5. Inspire and provoke. Develop and display leadership at all levels. Fight to be the best. 6. Be transparent.
We’re solving problems that change and save lives. 2. Powered by people. Members above all. Developing and growing others is what raises the bar. 3. No genius without grit. Be relentless. Be scrappy. Trying and failing beats not trying and changing nothing. 4. Seek the truth. But never assume you’ve found it. Be scientific. 9 Table of Contents 5.
The health insurance business also may be adversely impacted by court decisions that expand or invalidate the interpretations of existing statutes and regulations. It is uncertain whether we can recoup, through higher premiums or other measures, the increased costs caused by potential legislation, regulation, or court rulings.
The health insurance business also may be adversely impacted by court decisions that expand or invalidate the interpretations of existing statutes and regulations.
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.
Oscar has exclusive provider organization (“EPO”) plans in most of our markets, and also offers health maintenance organization (“HMO”) plans in select markets. We work with technology-forward, high brand-recognition health systems, including some of the largest health systems in the U.S.
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.
We maintain an internal HIPAA compliance program, which is designed to comply with HIPAA privacy and security regulations, adapt to new requirements if finalized, and have dedicated resources to monitor compliance with this program.
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.
Item 1. Business OUR BUSINESS Oscar is a leading healthcare technology company built around a full stack technology platform and a relentless focus on member experience. We offer health plans through the Patient Protection and Affordable Care Act (“ACA”) serving individuals, families, and employees.
We also believe in the importance of investing in education and development opportunities for our employees, and all employees have access to internally created and third party skills and training programs.
We also believe in the importance of investing in developmental opportunities for our employees, and all employees have access to internally created and third party skills and training programs. Lastly, we recognize that individuals may need to take time away from work for various reasons, so we offer paid time off and leave packages to all full-time employees.
The significant majority of our membership is acquired through the broker channel. As such we compete through the commissions and bonus structures we pay these partners.
The vast majority of our membership is acquired through the broker channel, and brokers typically use an Enhanced Direct Enrollment (EDE) platform to enroll the members in plans offered on the Health Insurance Marketplace. As such, we compete through the commissions and bonus structures we pay these partners.
OUR STRATEGIC FOCUS We built our strategy around several core trends in healthcare including consumerization, digitization, and the shift towards personalization. Over time, we have been observing the overall healthcare system move towards these trends, which not only validates our strategy, but provides us with a first mover advantage.
Over time, we have 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 approximately 1.68 million effectuated members as of December 31, 2024.
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.
SALES AND MARKETING Our marketing and sales initiatives focus on member growth through three primary avenues: acquiring members through brokers, acquiring members directly through Health Insurance Marketplaces, and acquiring members directly through our digital platform. As a part of our ICHRA initiatives, we also partner with ICHRA platform companies to enroll employees in Oscar plans through their platforms.
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.
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.
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.
This allows us to work more closely with high quality healthcare systems that engage with us using our technology and to negotiate more favorable reimbursement rates from these healthcare systems. The relative importance of each of the competitive factors mentioned in the above paragraphs and the identity of our principal competitors for members and providers varies by market and geography.
State Regulation of Insurance Companies and HMOs Our insurance and health maintenance organization (“HMO”) subsidiaries must obtain and maintain regulatory approvals to sell specific health plans in the jurisdictions in which they conduct business.
It is uncertain whether we can recoup, through higher premiums or other measures, the increased costs caused by potential legislation, regulation, or court rulings. 13 Table of Contents State Regulation of Insurance Companies and HMOs Our insurance and HMO subsidiaries must obtain and maintain regulatory approvals to sell specific health plans in the jurisdictions in which they conduct business.
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.
Membership may vary throughout the year due to disenrollments, any SEP, and other market dynamics that are in effect such as Medicaid redeterminations, other legislative or regulatory actions, or other factors that enable the overall market to grow or decline throughout the year.
As of December 31, 2023, we exclusively owned three registered trademarks in the United States for our name (Oscar, Oscar Health, and Oscar Care). In addition, we have registered domain names for websites that we use or may use in our business.
In addition, we have registered domain names for websites that we use or may use in our business.
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.
We believe our compensation philosophy and practice, which is rooted in data and benchmarked to a cohort of technology, healthcare, operations, and insurance peer companies, is transparent, systematic, and equitable.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThere 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.
Biggest changeThere 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, or maintain adequate networks that comply with regulatory requirements and standards; • insurance brokers that we rely on to build our member base are unable to market our insurance products effectively; 22 Table of Contents • we fail to attract brokers to sell our insurance products or lose important broker relationships to our competitors or otherwise, including in circumstances where we require brokers to use different enrollment services vendors; • the enhanced APTCs under the ARPA are eliminated or reduced, or other APTCs or subsidies under the ACA are eliminated or reduced; • our competitors or new market entrants successfully mimic our innovative product offerings or our full stack technology platform; • 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; • initiatives designed to improve member and provider experience, including the use of AI Technologies or other new technologies, are unsuccessful or discontinued, whether as a result of actions by us, our competitors, regulators, or other third parties; • as a result of changes in law or otherwise, our competitors participate in the individual market to a greater extent than they have previously; • there is an initiation of new SEPs or other unexpected healthcare market developments, including in response to legislative, regulatory or political developments and executive orders; • 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; • regulatory actions to improve the integrity in the ACA eligibility and enrollment process, such as the measures enacted by the CMS in 2024, make it more difficult for members to enroll in new plans or switch from one plan to another or otherwise retroactively remove members from ACA plans; • 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; • our strategic partners terminate or fail to renew our current contracts or we fail to enter into contracts with new strategic partners; or • our efforts to partner with ICHRA platforms to transition small, mid-sized and large employers to the individual market where their employees can choose an Oscar product are not successful, take significantly more time than expected to be successful.
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.
There is no assurance that a reduction in our plan pricing would enable us to maintain our competitive position, and any such reduction could 21 Table of Contents 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.
In addition, under Section 382 of the Code, if a corporation undergoes an “ownership change” (very generally defined as a greater than 50% change, by value, in the corporation’s equity ownership by certain shareholders or groups of shareholders over a rolling three-year period), the corporation’s ability to use its pre-ownership change NOLs to offset its post-ownership change income may be limited.
In addition, under Section 382 of the Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change, by value, in the corporation’s equity ownership by certain shareholders or groups of shareholders over a rolling three-year period), the corporation’s ability to use its pre-ownership change NOLs to offset its post-ownership change income may be limited.
We anticipate continued scrutiny by the HHS-OIG and the DOJ in the areas of fraud, waste, and abuse, including the use of telehealth and telemedicine-based treatment, and we may be subject to audits, reviews and investigations of our telehealth coverage and payment practices and arrangements by government agencies. 30 Table of Contents Risks Related to our Business If we are unable to arrange for the delivery of quality care, and maintain good relations with the physicians, hospitals, and other providers within and outside our provider networks, or if we are unable to enter into cost-effective contracts with such providers, or if we lose any of our limited number of in-network providers, our profitability could be adversely affected.
We anticipate continued scrutiny by the HHS-OIG and the DOJ in the areas of fraud, waste, and abuse, including the use of telehealth and telemedicine-based treatment, and we may be subject to audits, reviews and investigations of our telehealth coverage and payment practices and arrangements by government agencies. 32 Table of Contents Risks Related to our Business If we are unable to arrange for the delivery of quality care, and maintain good relations with the physicians, hospitals, and other providers within and outside our provider networks, or if we are unable to enter into cost-effective contracts with such providers, or if we lose any of our limited number of in-network providers, our profitability could be adversely affected.
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.
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 that they will be effective in controlling access to, and use and distribution of, our platform and proprietary information.
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.
Increased focus, including from regulators, investors, employees, clients, competitors and other stakeholders on sustainability or 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.
Each of the professional corporations comprising the Oscar Medical Group is wholly owned by a single physician licensed in California, Florida, New York and New Jersey, who oversees the operation of the Oscar Medical Group in her capacity as president and sole director of each Oscar Medical Group professional corporation.
However, each of the professional corporations comprising the Oscar Medical Group is wholly owned by a single physician licensed in California, Florida, New York and New Jersey, who oversees the operation of the Oscar Medical Group in her capacity as president and sole director of each Oscar Medical Group professional corporation.
Additionally, pursuant to the Investment Agreement, after the fifth anniversary of the Closing Date of the 2031 Notes, the initial holders of the 2031 Notes have the right to require us to repurchase all of their 2031 Notes for cash, on each of June 30, 2027, June 30, 2028, June 30, 2029 and June 30, 2030 (each, a “Repurchase Date”); provided that, among other conditions, a repurchase notice is delivered to the trustee under the Indenture no later than the later of (i) 120 days prior to the applicable Repurchase Date and (ii) 10 business days following the date on which we file our Annual Report on Form 10-K for the prior year.
Additionally, pursuant to the Investment Agreement, after the fifth anniversary of the Closing Date of the 2031 Notes, the initial purchasers of the 2031 Notes have the right to require us to repurchase all of their 2031 Notes for cash, on each of June 30, 2027, June 30, 2028, June 30, 2029 and June 30, 2030 (each, a “Repurchase Date”); provided that, among other conditions, a repurchase notice is delivered to the trustee under the Indenture no later than the later of (i) 120 days prior to the applicable Repurchase Date and (ii) 10 business days following the date on which we file our Annual Report on Form 10-K for the prior year.
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.
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 to 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, audits related to our compliance with network adequacy requirements, 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.
While we have extended the maturity date of our Revolving Credit Facility to December 28, 2025, our ability to obtain any additional financing, as and to the extent the Company elects to do so, will depend on a variety of factors such as market conditions, including recessionary factors, the general availability of credit, the volume of trading activities, the availability of credit to our industry, our credit ratings and credit capacity, as well as the possibility that customers or lenders could develop a negative perception of our long- or short-term financial prospects.
While we have extended the maturity date of our Revolving Credit Facility (as defined below) to December 28, 2025, our ability to obtain any additional financing, as and to the extent the Company elects to do so, will depend on a variety of factors such as market conditions, including recessionary factors, the general availability of credit, the volume of trading activities, the availability of credit to our industry, our credit ratings and credit capacity, as well as the possibility that customers or lenders could develop a negative perception of our long- or short-term financial prospects.
Because we rely on the Health Insurance Marketplaces, any changes to the ACA that result in reduced membership, or other changes in healthcare law and regulation, could materially and adversely impact our business, financial condition, and results of operations. 25 Table of Contents Risks Related to the Regulatory Framework that Governs Us Our business activities are subject to ongoing, complex, and evolving regulatory obligations, and to continued regulatory review, which result in significant additional expense and the diversion of our management’s time and efforts.
Because we rely on the Health Insurance Marketplaces, any changes to the ACA that result in reduced membership, or other changes in healthcare law and regulation, could materially and adversely impact our business, financial condition, and results of operations. 26 Table of Contents Risks Related to the Regulatory Framework that Governs Us Our business activities are subject to ongoing, complex, and evolving regulatory obligations, and to continued regulatory review, which result in significant additional expense and the diversion of our management’s time and efforts.
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.
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. 53 Table of Contents General Risk Factors The obligations associated with being a public company require significant resources and management attention.
Increasing scrutiny and changing expectations with respect to environmental, social and governance (“ESG”) matters may impose additional costs on us, impact our access to capital, or expose us to new or additional risks.
Increasing scrutiny and changing expectations with respect to sustainability and environmental, social and governance (“ESG”) matters may impose additional costs on us, impact our access to capital, or expose us to new or additional risks.
In the future, even if we are able to obtain necessary licenses and approvals, our +Oscar arrangements may pose further operational challenges, may not be implemented on our expected timetable or at all, may not perform as well as expected, may not achieve timely profitability or expected synergies, may require us to incur additional costs, may expose us to additional liability, or may result in limitations on our ability to offer products in certain insurance markets and geographic regions.
Even if we are able to obtain necessary licenses and approvals, our +Oscar arrangements may pose further operational challenges, may not be implemented on our expected timetable or at all, may not perform as well as expected, may not achieve timely profitability or expected synergies, may require us to incur additional costs, may expose us to additional liability, or may result in limitations on our ability to offer products in certain insurance markets and geographic regions.
We regularly assess potential NOL limitations under Section 382, and determined that an ownership change occurred in 2016; however, the corresponding limitation amount did not impact the ultimate pre-change NOL available for use. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.
We regularly assess potential NOL limitations under Section 382, and determined that an ownership change occurred in 2016; however, the corresponding limitation amount did not impact the ultimate pre-change NOL available for use. We may experience ownership changes as a result of subsequent shifts in our stock ownership, which may be outside of our control.
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.
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, 2024, our closing stock price ranged from a high of $36.77 to a low of $2.15.
For example, in order to obtain a certificate of authority to market and sell insurance in most jurisdictions, we must establish a provider network and demonstrate our ability to perform or delegate utilization management and other administrative functions, and we may be unable to complete these operational steps in a timely manner or at all.
For example, in order to obtain a certificate of authority to market and sell insurance in most jurisdictions, we must establish an adequate provider network and demonstrate our ability to perform or delegate utilization management and other administrative functions, and we may be unable to complete these operational steps in a timely manner or at all.
The partial or complete loss of a vendor or other third-party relationship could cause a material disruption to our business and make it difficult and costly to provide services and products that our regulators and members expect, which could have a material adverse effect on our financial condition, cash flows, and results of operations.
In addition, the partial or complete loss of a vendor or other third-party relationship could cause a material disruption to our business and make it difficult and costly to provide services and products that our regulators and members expect, which could have a material adverse effect on our financial condition, cash flows, and results of operations.
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.
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.
We contract with third-party vendors and service providers who provide services to us and our subsidiaries to help with our internal administrative functions, as well as third-party vendors and service providers who help us administer our products and plans. For example, Oscar delegates pharmacy claims and network management to a pharmacy benefit manager (PBM), CVS/Caremark.
We contract with third-party vendors and service providers who help us administer our products and plans, as well as vendors who provide services to help with our internal administrative functions. For example, Oscar delegates pharmacy claims and network management to a pharmacy benefit manager, CVS/Caremark.
Liability under such statutes and regulations may arise, among other things, if we knew, or it is determined that we should have known, that information we provided to form the basis for a claim for government payment was false or fraudulent, or that we were out of compliance with program requirements considered material to the government’s payment decision.
Liability under such statutes and regulations may arise, among other things, if we 30 Table of Contents knew, or it is determined that we should have known, that information we provided to form the basis for a claim for government payment was false or fraudulent, or that we were out of compliance with program requirements considered material to the government’s payment decision.
Many states have enacted separate legislation addressing balance billing or surprise medical bills. These laws and regulations vary in their approach, resulting in different impacts on the healthcare system as a whole. Our health insurance subsidiaries must also comply with numerous statutes and regulations governing the sale, marketing, and administration of insurance.
Many states have enacted separate legislation addressing balance billing or surprise 27 Table of Contents medical bills. These laws and regulations vary in their approach, resulting in different impacts on the healthcare system as a whole. Our health insurance subsidiaries must also comply with numerous statutes and regulations governing the sale, marketing, and administration of insurance.
This divergence increases the risk that any commitment, position, target or other action or lack thereof with respect to ESG matters will be perceived negatively by at least some stakeholders and adversely impact our reputation and business. 43 Table of Contents It is possible that stakeholders may not be satisfied with our ESG practices or the speed of their adoption.
This divergence increases the risk that any commitment, position, target or other action or lack thereof with respect to ESG matters will be perceived negatively by at least some stakeholders and adversely impact our reputation and business. It is possible that stakeholders may not be satisfied with our ESG practices or the speed of their adoption.
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.
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 PSI-DSS, which is a multifaceted security standard that is designed to protect credit card account data as mandated by PCI-DSS entities.
This could result in substantial costs or other operational or financial problems that could have a material adverse effect on our business, financial condition, cash flows, or results of operations. From time to time, we may become involved in costly and time-consuming litigation and regulatory audits and actions, which require significant attention from our management.
This could result in substantial costs or other operational or financial problems that could have a material adverse effect on our business, financial condition, cash flows, or results of operations. 37 Table of Contents From time to time, we may become involved in costly and time-consuming litigation and regulatory audits and actions, which require significant attention from our management.
Our Amended Charter, our amended and restated bylaws (the "Amended Bylaws"), and Delaware law contain provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors.
Our Amended Charter, our amended and restated bylaws (the “Amended Bylaws”), and Delaware law contain provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors.
In certain years prior to plan year 2024, our business offerings included Medicare Advantage plans. 29 Table of Contents The DOJ and the HHS-OIG have continuously increased their scrutiny of healthcare payors and providers, and Medicare Advantage insurers, under the FCA, in particular, which has led to a number of investigations, prosecutions, convictions, and settlements in the healthcare industry.
In certain years prior to plan year 2024, our business offerings included Medicare Advantage plans. The DOJ and the HHS-OIG have continuously increased their scrutiny of healthcare payors and providers, and Medicare Advantage insurers, under the FCA, in particular, which has led to a number of investigations, prosecutions, convictions, and settlements in the healthcare industry.
As described above, any such decision or action would result in an increase in required capital in our insurance subsidiaries, which may be material. Our reinsurance arrangements also subject us to various obligations, representations, and warranties with respect to the reinsurers. Reinsurance does not relieve us of liability as an insurer.
As described above, any such decision or action would result in an increase in required capital in our insurance subsidiaries, which may be material. 35 Table of Contents Our reinsurance arrangements also subject us to various obligations, representations, and warranties with respect to the reinsurers. Reinsurance does not relieve us of liability as an insurer.
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.
We also rely on a 40 Table of Contents 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.
These include hiring additional personnel; continuing to develop our proprietary full stack technology platform, member engagement engine and operations, including by utilizing artificial intelligence and machine learning; acquiring more members; maintaining existing members; investing in partnerships, collaborations and acquisitions; expanding into additional business lines; and expanding our +Oscar platform offerings.
These include hiring additional personnel; continuing to develop our proprietary full stack technology platform, member engagement engine and operations, including by utilizing artificial intelligence and machine learning; acquiring more members; maintaining existing members; investing in partnerships, collaborations and acquisitions; expanding into additional business lines, such as ICHRA; and expanding our +Oscar platform offerings.
We partner with third parties, including Amazon, Appian, inContact, and Google, to support our information technology systems. Our information systems and applications require continual maintenance, upgrading, and enhancement to meet our current and expected operational needs and regulatory requirements.
We partner with third parties, including Amazon and Google, to support our information technology systems. Our information systems and applications require continual maintenance, upgrading, and enhancement to meet our current and expected operational needs and regulatory requirements.
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.
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 insurance coverage.
We are unable to predict if we will be able to effectively and consistently service our +Oscar arrangements and any future +Oscar arrangements, which risk may increase over time as we enter into material +Oscar arrangements. We cannot provide any assurance that the data we collect will provide useful measures for evaluating our business model.
We are unable to predict if we will always be able to effectively and consistently service our current +Oscar arrangements and any future +Oscar arrangements, which risk may increase over time as we enter into more material +Oscar arrangements. We cannot provide any assurance that the data we collect will provide useful measures for evaluating our business model.
Negative public perception, adverse publicity or negative comments in social media could damage our reputation or harm our relationships with regulators, employees or our customers, if we do not, or are not perceived to, adequately address these issues, including if we fail to demonstrate progress towards any current or future ESG goals.
Negative public perception, adverse publicity or negative comments in social media could damage our reputation or harm our relationships with regulators, employees, customers, investors or other stakeholders if we do not, or are not perceived to, adequately address these issues, including if we fail to demonstrate progress towards any current or future ESG goals.
Health plans and providers often seek to resolve these types of allegations through settlement for significant and material amounts, even when they do not acknowledge or admit liability, to avoid the uncertainty of treble damages that may be awarded in litigation proceedings.
Health plans and providers often seek to resolve these types of allegations through 31 Table of Contents settlement for significant and material amounts, even when they do not acknowledge or admit liability, to avoid the uncertainty of treble damages that may be awarded in litigation proceedings.
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.
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.
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.
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 • 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. 52 Table of Contents These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.
Any such guidance will be comprised of forward-looking statements subject to the risks and uncertainties described in this report, and in our other public filings and public statements. Our actual results may not always be in line with or exceed any guidance we have provided, especially in times of economic uncertainty.
Such guidance consists of forward-looking statements subject to the risks and uncertainties described in this report, and in our other public filings and public statements. Our actual results may not always be in line with or exceed any guidance we have provided, especially in times of economic uncertainty.
Our IT Systems, Confidential 36 Table of Contents Information and facilities are also vulnerable to security incidents or security attacks, ransomware attacks, malware, or other forms of cyber-attack, acts of vandalism or theft, misplaced or lost data, human errors, or other similar events that could negatively affect our IT Systems, and our Confidential Information.
Our IT Systems, Confidential Information and facilities are also vulnerable to security incidents or security attacks, ransomware attacks, malware, or other forms of cyber-attack, acts of vandalism or theft, misplaced or lost data, human errors, or other similar events that could negatively affect our IT Systems, and our Confidential Information.
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.
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.
Although additional ARPA subsidies have been extended through 2025, the future elimination or reduction of APTCs or other subsidies could make such coverage unaffordable to some individuals and thereby reduce overall participation in the Health Insurance Marketplaces and our membership.
Although the enhanced APTCs have been extended through 2025, the future elimination or reduction of the enhanced APTCs, or other APTCs or subsidies, could make such coverage unaffordable to some individuals and thereby reduce overall participation in the Health Insurance Marketplaces and our membership.
The extent of a particular cyber-attack and the steps that we may need to take to investigate the attack may take a significant amount of time and resources before such an investigation could be completed and full and reliable information about the incident is known.
The extent of a particular cyber-attack 39 Table of Contents and the steps that we may need to take to investigate the attack may take a significant amount of time and resources before such an investigation could be completed and full and reliable information about the incident is known.
There can be no assurance that we will receive premiums in advance of or by the end of a given coverage period. Moreover, actions taken by state and federal governments could increase the likelihood of delay in our receipt of premiums.
There can be no assurance that we will receive premiums in advance of or by the end of a given coverage period. Moreover, actions taken by state and federal governments could increase the likelihood of delay in 43 Table of Contents our receipt of premiums.
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.
If we fail to effectively comply with regulatory requirements, or fail to 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.
Risks relating to our IT Systems have generally increased in recent years because of the proliferation of new technologies—including artificial intelligence— and the increased sophistication and activities of perpetrators of cyber-attacks, as well as a result of an increase in work-from-home and hybrid work arrangements due to the COVID-19 pandemic and geopolitical events involving high cyber-risk countries.
Risks relating to our IT Systems have generally increased in recent years because of the proliferation of new technologies—including artificial intelligence— and the increased sophistication and activities of perpetrators of cyber-attacks, as well as a result of an increase in work-from-home and hybrid work arrangements and geopolitical events involving high cyber-risk countries.
In some states, and under federal law for our business subject to the No Surprises Act, the amount of compensation and/or process to dispute out-of-network reimbursement amounts is defined by law or regulation.
In some states, and under federal law for our business subject to the No Surprises Act, the amount of compensation and/or process to dispute out-of- 33 Table of Contents network reimbursement amounts is defined by law or regulation.
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.
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.
Additionally, if we are not able to grow our membership, we may be unable to attract additional partners to our +Oscar platform or maintain existing +Oscar partnerships, which could materially affect our ability to execute our growth strategy.
Additionally, if we are not able to grow our membership, we may be unable to attract additional partners to our +Oscar platform or maintain existing +Oscar partnerships, which could impact our ability to execute our growth strategy.
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.
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.
As of December 31, 2023, we had federal income tax NOLs of $2.3 billion, which are currently subject to a full valuation allowance. The NOLs are available to offset our future taxable income, if any, prior to consideration of annual limitations that may be imposed under Section 382 of the U.S.
As of December 31, 2024, we had federal income tax NOLs of $2.2 billion and state NOLs of $1.3 billion, which are currently subject to a full valuation allowance. The NOLs are available to offset our future taxable income, if any, prior to consideration of annual limitations that may be imposed under Section 382 of the U.S.
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.
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 47 Table of Contents bankruptcy or liquidation.
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.
For each of the years ended December 31, 2024 and 2023, approximately 97% 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 also cannot guarantee that applicable insurance will be available to us in the future on economically reasonable terms or at all. Additionally, as we accept debit and credit cards for payment, we are subject to the PCI Data Security Standard (“PCI-DSS”), issued by the Payment Card Industry Security Standards Council.
We also cannot guarantee that applicable insurance will be available to us in the future on economically reasonable terms or at all. Additionally, as we accept debit and credit cards for payment, we are subject to the PCI-DSS, issued by the Payment Card Industry Security Standards Council.
Additional disclosures under the Health Plan Transparency Rule went into effect in 2023 (personalized out-of-pocket cost information and negotiated rates for specified healthcare items and services) and will be further expanded in 2024 (all items and services).
Additional disclosures under the Health Plan Transparency Rule went into effect in 2023 (personalized out-of-pocket cost information and negotiated rates for specified healthcare items and services) and was expanded in 2024 (all items and services).
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.
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 $553.8 million of additional capital as of December 31, 2024, which Parent would have been required to fund to the extent the applicable insurance subsidiary did not have excess capital to cover the requirement.
If it is determined that our estimates are significantly different from actual results, our results of operations and financial position could be adversely affected. We have a history of losses, and we may not achieve or maintain profitability in the future.
If it is determined that our 24 Table of Contents estimates are significantly different from actual results, our results of operations and financial position could be adversely affected. We have a history of losses, and we may not maintain profitability in the future.
In addition, given the costs, effort, and risks of obtaining patent protection, including the requirement to ultimately disclose the invention to the public, we may choose not to seek patent protection for certain innovations. Any failure to adequately obtain such patent protection, or other intellectual property protection, could later prove to adversely impact our business.
In addition, given the costs, effort, and risks of obtaining patent protection, including the requirement to ultimately disclose the invention to the public, we continue not to choose to seek patent protection. Any failure to adequately obtain patent protection, or other intellectual property protection, could later prove to adversely impact our business.
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.
As of December 31, 2024, we had outstanding indebtedness due to our issuance in February 2022 of $305.0 million in aggregate principal amount of our 2031 Notes in a private placement. We may incur additional indebtedness in the future, including borrowings under the Revolving Credit Facility.
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.
Based on a final rule issued by CMS in January 2023, overpayments to MA plans that are identified as a result of RADV audit will be subject to extrapolation for plan year 2018 and any subsequent plan year.
We are a public reporting company subject to the rules and regulations established by the SEC and the NYSE. These rules and regulations require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial reporting.
We are a public reporting company subject to the rules and regulations established by the SEC and the New York Stock Exchange (“NYSE”). These rules and regulations require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial reporting.
As of December 31, 2023, the holders of our outstanding Class B common stock, which consist of Thrive Capital and our Co-Founders, beneficially own 20.9% of our outstanding capital stock and hold 81.4% of the voting power of our outstanding capital stock (assuming the exercise of all options to acquire shares of Class B common stock and the conversion of the 2031 Notes, in each case that are beneficially owned as of December 31, 2023).
As of December 31, 2024, the holders of our outstanding Class B common stock, which consist of Thrive Capital and our Co-Founders, beneficially own 19.7% of our outstanding capital stock and hold 79.9% of the voting power of our outstanding capital stock (assuming the exercise of all options to acquire shares of Class B common stock and the conversion of the 2031 Notes, in each case that are beneficially owned as of December 31, 2024).
We and our vendors are subject to various federal and state laws, regulations, rules, and industry standards and other requirements including those that apply generally to the handling of information about individuals, and those that are specific to certain industries, sectors, contexts, or locations.
We and our vendors are subject to various federal and state laws, regulations, rules, and industry standards and other requirements including those that apply generally to the handling of information about individuals, and those that are specific to certain industries, sectors, contexts, or locations. These laws and regulations include, among others, HIPAA, CCPA and CPRA.
We are a “controlled company” within the meaning of the rules of NYSE and, as a result, we rely on exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
We are a “controlled company” within the meaning of the rules of NYSE and, as a result, we may rely on exemptions from certain corporate governance requirements and, if we chose to do so, you will not have the same protections afforded to stockholders of companies that are not exempt from such requirements.
Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our offerings. Such arrangements may limit our ability to protect, maintain, enforce, or commercialize such intellectual property rights.
Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our offerings. Such arrangements may limit our ability to protect, maintain, enforce, or commercialize such intellectual property rights or the technology or services that are based upon or covered by such intellectual property rights.
While none of such state or federal required or recommended moratoria carried over into 2023, if such or similar measures were to be reintroduced and to remain in place for an extended period due to a resurgence of COVID-19 or for other reasons, including unanticipated public health or economic crises, our receipt of premiums, if any, could be significantly delayed, which could have a material adverse effect on our business, operations, cash flows, or earnings.
While none of such state or federal required or recommended moratoria are still in effect, if similar measures were to be reintroduced and to remain in place for an extended period due to unanticipated public health or economic crises, our receipt of premiums, if any, could be significantly delayed, which could have a material adverse effect on our business, operations, cash flows, or earnings.
These laws permit the Department of Justice (“DOJ”), the HHS Office of Inspector General (“HHS-OIG”), CMS, and other enforcement authorities to institute a claim, action, investigation, or other proceeding against us for violations and, depending on the facts and circumstances, to seek treble damages, criminal and civil fines, penalties, and assessments, including for any alleged violations that occurred while we offered Medicare Advantage plans.
These laws permit the DOJ, the HHS-OIG, CMS, and other enforcement authorities to institute a claim, action, investigation, or other proceeding against us for violations and, depending on the facts and circumstances, to seek treble damages, criminal and civil fines, penalties, and assessments, including for any alleged violations that occurred while we offered Medicare Advantage plans.
When aggregating the payments we make to each provider through its local affiliates, AdventHealth, HCA Healthcare and University of Miami Hospital & Medical Group accounted for a total of approximately 15%, 9% and 9%, respectively, of total allowable medical costs for the three months ended December 31, 2023, and approximately 14%, 9% and 8%, respectively, of total allowable medical costs for the year ended December 31, 2023.
When aggregating the payments we make to each provider through its local affiliates, AdventHealth, HCA Healthcare, and University of Miami Hospital & Medical Group accounted for a total of approximately 10%, 8% and 7%, respectively, of total allowable medical costs for the year ended December 31, 2024.
Our existing intellectual property, and any intellectual property granted to us, or that we otherwise acquire in the future, may be contested, circumvented, or invalidated. Therefore, the exact effect of the protection of this intellectual property cannot be predicted with certainty.
In addition, we may not receive competitive advantages from the rights granted under our intellectual property. Our existing intellectual property, and any intellectual property granted to us, or that we otherwise acquire in the future, may be contested, circumvented, or invalidated. Therefore, the exact effect of the protection of this intellectual property cannot be predicted with certainty.
If our operating and financial performance in any given period does not meet the guidance that we provide to the public, the market price of our Class A common stock may decline. We may, but are not obligated to, provide public guidance on our expected operating and financial results for future periods.
If our operating and financial performance in any given period does not meet the guidance that we provide to the public, the market price of our Class A common stock may decline. We have historically provided public guidance on our expected operating and financial results for future periods, and may continue to do so in the future.
Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.
Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds 50 Table of Contents and could make our Class A common stock less attractive to other investors.
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 made by Parent to our health insurance subsidiaries.
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 made by Parent to our health insurance subsidiaries or a decrease in funds available for distributions and dividends from our health insurance subsidiaries to Parent.
Our inability or decision not to pay dividends could also adversely affect the market price of our Class A common stock. 47 Table of Contents We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock.
We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock.
As a result, termination of our reinsurance arrangements through one or more of these scenarios could harm our business, results of operations, and financial condition. While our financial reporting is based on U.S.
As a result, termination of our reinsurance arrangements through one or more of these scenarios could harm our business, results of operations, and financial condition.
Due to the geographic concentration of our business, we are exposed to heightened risks of potential losses resulting from unfavorable changes in the regulatory environment for healthcare, increased competition, and other regional factors in these states.
The states in which we operate that have the largest concentrations of revenues include Florida, Texas and Georgia. Due to the geographic concentration of our business, we are exposed to heightened risks of potential losses resulting from unfavorable changes in the regulatory environment for healthcare, increased competition, and other regional factors in these states.
As a result, you may have to sell some or all of your Class A common stock after price appreciation in order to generate cash flow from your investment, which you may not be able to do.
As a result, you may have to sell some or all of your Class A common stock after price appreciation in order to generate cash flow from your investment, which you may not be able to do. Our inability or decision not to pay dividends could also adversely affect the market price of our Class A common stock.
We also engage with other third parties, including Appian Corporation and inContact, Inc. for our product offerings and internal operations.
We also engage with other third parties, for our product offerings and internal operations.
For example, we do not have any patents, which limits our ability to deter patent infringement claims by competitors and other third parties who may hold or obtain patents.
However, there are steps that we have not yet taken to protect our intellectual property. For example, we do not have any patents, which limits our ability to deter patent infringement claims by competitors and other third parties who may hold or obtain patents.
We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, we do not anticipate declaring or paying any cash dividends on our Class A common stock in the foreseeable future.
We do not intend to pay dividends on our Class A common stock for the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business.
We may be subject to claims by others that we are infringing on their intellectual property rights. Our competitors, as well as a number of other entities and individuals, including so-called non-practicing entities, may own or claim to own intellectual property relating to or covering the operation of our business.
Our competitors, as well as a number of other entities and individuals, including so-called non-practicing entities, may own or claim to own intellectual property relating to or covering the operation of our business. From time to time, third parties claim that we are infringing upon their intellectual property rights or that we have misappropriated their intellectual property.
As initially disclosed in Part II, Item 9A, “Controls and Procedures,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, in connection with our audit of the Consolidated Financial Statements for the year ended December 31, 2021, we identified a material weakness in our internal control over financial reporting related to information technology general controls. 40 Table of Contents Although such material weakness was remediated in 2023, we can give no assurance that additional material weaknesses will not be identified in the future.
As initially disclosed in Part II, Item 9A, “Controls and Procedures,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, in connection with our audit of the Consolidated Financial Statements for the year ended December 31, 2021, we identified a material weakness in our internal control over financial reporting related to information technology general controls.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls, and conduct tabletop exercises to validate our cybersecurity incident response processes; 50 Table of Contents • the use of various technology and process-based methods, such as network isolation, intrusion detection systems, vulnerability assessments, penetration testing, use of threat intelligence, content filtering, endpoint security (including anti-malware and detection response capabilities), email security mechanisms, and access control mechanisms; • cybersecurity awareness training of our employees, including incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management and diligence process for vendors and service providers.
Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; 54 Table of Contents • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls, and conduct tabletop exercises to validate our cybersecurity incident response processes; • the use of various technology and process-based methods, such as network isolation, intrusion detection systems, vulnerability assessments, penetration testing, use of threat intelligence, content filtering, endpoint security (including anti-malware and detection response capabilities), email security mechanisms, and access control mechanisms; • cybersecurity awareness training of our employees, including incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management and diligence process for vendors and service providers.
See “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.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to t he Audit Committee (Committee) oversight of cybersecurity risks.
See Part I, Item 1A “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.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to t he Audit Committee (Committee) oversight of cybersecurity risks.
Removed
We face risks from cybersecurity threats that, if realized and material, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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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
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 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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
Biggest changeCompany/Index 03/03/21 12/31/21 12/31/22 12/31/23 12/31/24 Oscar Health, Inc. $ 100.00 $ 22.56 $ 7.07 $ 26.29 $ 38.62 S&P 500 $ 100.00 $ 126.22 $ 103.34 $ 130.48 $ 163.09 Peer Group $ 100.00 $ 131.10 $ 141.76 $ 129.93 $ 100.48
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.
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 Health, Inc., and Accolade, Inc.
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.
Holders As of January 31, 2025, there were 16 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 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.
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 that any dividends were reinvested. The comparisons reflected in the graph are not intended to forecast or otherwise be indicative of the future performance of our stock.
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”).
Each of the Thrive Capital affiliated funds and the Anahata Foundation may be deemed to be an “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act. 57 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, 2024, relative to the performance of the S&P 500 Index and a group of eleven peers selected by the Company.
Removed
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.
Added
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchasers The following table sets forth purchases of shares of our Class A common stock made during the three months ended December 31, 2024 by or on behalf of the Company or an “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act.
Removed
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.
Added
Period Total Number of Class A Shares Purchased Average Price Paid per Class A Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) 11/1/24 to 11/30/24 2,521,728 (1) $14.40 per share — — (1) Includes (i) 1,588,395 shares purchased in open market transactions by funds affiliated with Thrive Capital.
Added
Joshua Kushner, the Vice Chairman of our board of directors, is the sole managing member of each of the General Partners of the Thrive Capital affiliated funds and (ii) 933,333 shares purchased in open market transactions by the Anahata Foundation, a charitable foundation established by Mark T. Bertolini, our Chief Executive Officer.

Item 7. Management's Discussion & Analysis

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

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Biggest changeSee Note 15 - Long-Term Debt to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information. 66 Table of Contents Revolving Credit Facility On December 28, 2023, we entered into a third amendment to our senior secured credit agreement (the “Third Amendment”), with Wells Fargo Bank, National Association, as administrative agent, Oscar Management Corporation, as a subsidiary guarantor and certain other lenders which amended the senior secured credit agreement, dated as of February 21, 2021 (as amended by the First Amendment to Credit Agreement, dated as of January 27, 2022, and as further amended by the Second Amendment to Credit Agreement, dated as of July 21, 2023, the “Credit Agreement” and as amended by the Third Amendment, the “Amended Credit Agreement”).
Biggest changeFor additional details relating to the 2031 Notes, see Note 9 - Debt to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K, and, “Risk Factors–Risks Related to Indebtedness–Our debt obligations contain restrictions that impact our business and expose us to risks that could materially adversely affect our liquidity and financial condition” and “Risk Factors–Risks Related to Indebtedness–We may be unable to raise the funds necessary to repurchase our outstanding 2031 Notes for cash following a fundamental change or on the optional repurchase dates, or to pay any cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase the 2031 Notes or pay cash upon their conversion.” Revolving Credit Facility On December 28, 2023, we entered into a third amendment to our senior secured credit agreement (the “Third Amendment”), with Wells Fargo Bank, National Association, as lender and the administrative agent, and certain other lenders party thereto from time to time (collectively the “Lenders”), and Oscar Management Corporation, as a subsidiary guarantor, which amended the senior secured credit agreement, dated as of February 21, 2021 (as amended by the First Amendment to Credit Agreement, dated as of January 27, 2022, and as further amended by the Second Amendment to Credit Agreement, dated as of July 21, 2023, the “Credit Agreement” and as amended by the Third Amendment, the “Amended Credit Agreement”).
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.
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 payable on debt, other current liabilities and purchase commitments and other obligations.
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.
The following discussion and analysis does not include certain items related to the year ended December 31, 2023, including year-to-year comparisons between the year ended December 31, 2023 and the year ended December 31, 2022. For a comparison of our results of operations for the fiscal years ended December 31, 2023 and December 31, 2022, see Item 7.
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.
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.” 69 Table of Contents Our health insurance subsidiaries also utilize quota share reinsurance arrangements to reduce our minimum capital and surplus requirements, which are designed to enable us to efficiently deploy capital to fund our growth.
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.
Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”) Adjusted EBITDA is defined as Net income (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.
The majority of the assets held by our health insurance subsidiaries is in the form of cash and cash equivalents and investments.
The majority of the assets held by our health insurance subsidiaries are in the form of cash and cash equivalents and investments.
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.
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, 2023, filed with the SEC on February 15, 2024.
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.
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 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.
The 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. Our primary operating cash flow sources are premiums and investment income.
For example, during the third quarter of 2023, we made a payment through our health insurance subsidiaries of approximately $1.4 billion into the risk adjustment program, primarily for the 2022 policy year. Therefore, timing of payments and receipts can influence cash flows from operating activities in any given period which would have a negative impact on our operating cash flows.
For example, during the third quarter of 2024, we made a payment through our health insurance subsidiaries of approximately $1,056.8 million into the risk adjustment program, for the 2023 policy year. As such, timing of payments and receipts can influence cash flows from operating activities in any given period which would have a negative impact on our operating cash flows.
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.
Assuming a hypothetical 1% difference between our December 31, 2024 estimates of benefits payable and actual benefits payable, excluding any potential offsetting impact from premium rebates, net earnings for the year ended December 31, 2024 would have increased by approximately $172.7 million or decreased by approximately $165.6 million.
In the individual and small group lines, there is a higher degree of uncertainty associated with estimates of risk transfers at the beginning of the policy year resulting from composition of the risk score being based on concurrent claim data.
There is a higher degree of uncertainty associated with estimates of risk adjustment transfers at the beginning of the policy year resulting from composition of the risk score being based on concurrent claim data.
Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for Net loss or other financial statement data presented in our Consolidated Financial Statements as indicators of financial performance.
Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for Net income (loss) or other financial statement data presented in our Consolidated Financial Statements as indicators of financial performance. A reconciliation of Adjusted EBITDA from Net income (loss) is provided under “Results of Operations-Adjusted EBITDA”.
The 2031 Notes bear interest at a rate of 7.25% per annum, payable in cash, semi-annually in arrears on June 30 and December 31 of each year, commencing on June 30, 2022.
The 2031 Notes bear interest at a rate of 7.25% per annum, payable in cash, semi-annually in arrears on June 30 and December 31 of each year, commencing on June 30, 2022. The 2031 Notes will mature on December 31, 2031, subject to earlier repurchase, redemption, or conversion.
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.
We estimate that had we not had any quota share reinsurance arrangements in place, the health insurance subsidiaries would have been required to hold approximately $553.8 million and $447.1 million of additional capital as of December 31, 2024 and 2023 , respectively, which the Parent would have been required to fund to the extent the applicable insurance subsidiary did not have excess capital to cover the requirement.
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.
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.
For periods prior to the two most recent months, completion factors include judgments related to claim submissions such as the time from date of service to claim receipt, claim levels, and processing cycles, as well as other factors.
Completion factors are the most significant factors we use in developing our benefits payable estimates. For periods prior to the two most recent months, completion factors include judgments related to claim submissions such as the time from date of service to claim receipt, claim levels, and processing cycles, as well as other factors.
For the most recent two months, the completion factors are informed primarily from forecasted per member per month claims projections developed from our historical experience and adjusted by emerging experience data in the preceding months which may include adjustments for known changes in estimates of recent hospital and drug utilization data, provider contracting changes, changes in benefit levels, changes in member cost sharing, changes in medical management processes, product mix, and workday seasonality. 69 Table of Contents The following table illustrates the sensitivity of the estimated potential impact on our benefits payable estimates gross of reinsurance, for those periods as of December 31, 2023 to an increase (decrease) in the underlying completion factors: Changes in Estimates Increase (Decrease) in Benefits Payable (in thousands) (1.00)% $ 116,012 (0.75)% 86,790 (0.50)% 57,714 (0.25)% 28,785 0.25% (28,641) 0.50% (56,797) 0.75% (83,390) 1.00% (109,549) Management believes the amount of benefits payable is reasonable and adequate to cover our liability for unpaid claims as of December 31, 2023; however, actual claim payments may differ from established estimates as discussed above.
For the most recent two months, the completion factors are informed primarily from forecasted per member per month claims projections developed from our historical experience and adjusted by emerging experience data in the preceding months which may include adjustments for known changes in estimates of recent hospital and drug utilization data, provider contracting changes, changes in benefit levels, changes in member cost sharing, changes in medical management processes, product mix, and workday seasonality. 63 Table of Contents The following table illustrates the sensitivity of the estimated potential impact on our benefits payable estimates gross of reinsurance, for those periods as of December 31, 2024 to an increase (decrease) in the underlying completion factors: Changes in Estimates Increase (Decrease) in Benefits Payable (in thousands) (1.00)% $ 172,729 (0.75)% 129,221 (0.50)% 85,931 (0.25)% 42,858 0.25% (42,644) 0.50% (85,076) 0.75% (126,673) 1.00% (165,622) Management believes the amount of benefits payable is reasonable and adequate to cover our liability for unpaid claims as of December 31, 2024; however, actual claim payments may differ from established estimates as discussed above.
During the year ended December 31, 2023 and 2022, Parent made $19.5 million and $423.5 million of capital contributions, respectively, to the health insurance subsidiaries.
During the years ended December 31, 2024 and 2023, the Parent made $146.6 million and $19.5 million of capital contributions, respectively, to the health insurance subsidiaries.
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.
As of December 31, 2024 and December 31, 2023, total cash and cash equivalents and investments held by our health insurance subsidiaries was $3,808.0 million and $2,721.2 million, respectively, of which $18.0 million and $17.3 million, respectively, was on deposit with regulators as required for statutory licensing purposes. These amounts are classified as restricted deposits on the Consolidated Balance Sheets.
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.
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.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A."Risk Factors" of this Annual Report on Form 10-K.
The discussion contains forward-looking statements that involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A.”Risk Factors” of this Annual Report on Form 10-K.
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.
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 the net premium before ceded quota share reinsurance.
We believe these operational and financial measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP.
We believe these operational and financial measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP. Total Revenue Total revenue includes Premium revenue, Investment income, and Services and other revenue.
Long-Term Cash Requirements Our long-term cash requirements under our various contractual obligations and commitments include: • Operating leases. See Note 13 – Leases 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 expected future payments. • Interest payable.
See Note 13 – Leases 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 expected future payments.
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.
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. In the case of federal and state-run reinsurance programs, no reinsurance premiums are paid.
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.
Year Ended December 31, (in thousands) 2024 2023 Net Income (loss) $ 26,121 $ (270,594) Interest expense 23,734 24,603 Other expenses (income) 105 7,082 Income tax expense 7,305 3,294 Depreciation and amortization 32,145 30,694 Stock-based compensation (1) 109,824 159,683 Adjusted EBITDA $ 199,234 $ (45,238) (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.
INDEX TO MD&A Management's discussion and analysis of financial condition and results of operations is comprised of the following sections: Page Overview 54 Recent Developments, Trends and Other Factors Impacting Performance 55 Financial Results Summary and Key Operating and Non-GAAP Financial Metrics 57 Components of our Results of Operations 61 Results of Operations 63 Liquidity and Capital Resources 65 Summary of Cash Flows 68 Critical Accounting Policies and Estimates 69 Overview Oscar is the first health insurance company built around a full stack technology platform and a relentless focus on serving our members.
INDEX TO MD&A Management's discussion and analysis of financial condition and results of operations is comprised of the following sections: Page Overview 59 Recent Developments, Trends and Other Key Factors Impacting Performance 55 Critical Accounting Policies and Estimates 62 Components of our Results of Operations 65 Results of Operations 66 Liquidity and Capital Resources 69 Overview Oscar is a leading healthcare technology company built around a full stack technology platform and a relentless focus on member experience.
The health insurance subsidiaries in aggregate exceeded the minimum statutory RBC requirement by $198 million as of December 31, 2022 and are projected to have approximately $285 million of excess capital as of December 31, 2023.
The health insurance subsidiaries historically have required capital contributions from Parent to maintain minimum levels. The health insurance subsidiaries in aggregate exceeded the minimum statutory RBC requirement by $301 million as of December 31, 2023 and are projected to have approximately $774 million of excess capital as of December 31, 2024.
Convertible Senior Notes On January 27, 2022, we entered into an investment agreement (the “Investment Agreement”) pursuant to which we agreed to issue and sell $305.0 million in aggregate principal amount of 7.25% convertible senior notes due 2031 (the “2031 Notes”) in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC and Tenere Capital LLC.
Convertible Senior Notes On February 3, 2022, we issued $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC and Tenere Capital LLC (the “Initial Purchasers”).
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.
For example, in recent months, we estimate claim costs incurred by applying assumed medical cost trends to the per member per month (“PMPM”) medical costs incurred in prior months for which more complete claim data is available, supplemented by a review of near-term completion factors.
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.
Critical Accounting Policies and Estimates The preparation of Consolidated Financial Statements in conformity with U.S. 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.
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 our health insurance subsidiaries have collectively become profitable and to the extent their levels of statutory capital and surplus continue to 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 require approval by our regulators.
Benefits Payable Benefits payable includes estimates of the ultimate cost of claims that have been incurred but not reported, including expected development on reported claims, those that have been reported but not yet paid (reported claims in process) and other medical care expenses and services payable.
Other accounting policies are disclosed in Item 8, Financial Statements and Supplementary Data in this Annual Report on Form 10-K. 62 Table of Contents Benefits Payable Benefits payable includes estimates of the ultimate cost of claims that have been incurred but not reported, including expected development on reported claims, those that have been reported but not yet paid (reported claims in process) and other medical care expenses and services payable.
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.
By providing this non-GAAP financial measure, together with a reconciliation to the most comparable U.S. GAAP measure, Net income (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.
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.
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 as of December 31, 2024 and 2023 should be read in conjunction with our audited Consolidated Financial Statements and the related notes included elsewhere in this filing.
Completion Factors A completion factor is an actuarial estimate, based upon historical experience and analysis of current trends, of the percentage of incurred claims during a given period that have been adjudicated by us at the date of estimation. Completion factors are the most significant factors we use in developing our benefits payable estimates.
Additional consideration is also given to adjudicated claims that may reopen as a result of provider disputes. Completion Factors A completion factor is an actuarial estimate, based upon historical experience and analysis of current trends, of the percentage of incurred claims during a given period that have been adjudicated by us at the date of estimation.
Year ended December 31, 2023 includes a non-recurring charge of $46.3 million related to accelerated stock-based compensation expense recognized as a result of the cancellation of the Founders Awards. Refer to Note 10 - Stock Based Compensation for additional information.
Additionally, these expenses are reported net of any stock-based compensation that has been capitalized for software development costs. Year ended December 31, 2023 includes a non-recurring charge of $46.3 million related to accelerated stock-based compensation expense recognized as a result of the cancellation of the Founders Awards.
The transaction contemplated by the Investment Agreement closed on February 3, 2022 (the “Closing Date”). In connection with the issuance of the 2031 Notes, on February 3, 2022, we entered into an Indenture between us and U.S. Bank National Association, as trustee.
In connection with the sale and issuance of the 2031 Notes, on January 27, 2022, we entered into an investment agreement with the Initial Purchasers (the “Investment Agreement”) and on February 3, 2022, we entered into an indenture with U.S. Bank, as Trustee (the “Indenture”).
The Revolving Credit Facility permits us to increase commitments under the Revolving Credit Facility by an aggregate amount not to exceed $50 million.
The Revolving Credit Facility permits us to increase commitments under the Revolving Credit Facility by an aggregate amount not to exceed $50 million, subject to certain conditions. As of December 31, 2024, there were no outstanding borrowings under the Revolving Credit Facility.
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.
The combined statutory capital and surplus of our health insurance subsidiaries was estimated to be approximately $1,242.7 million as of December 31, 2024, and it was $800.6 million as of December 31, 2023, which was in compliance with and in excess of the minimum capital requirements for each period.
The impact of changes in estimates is recorded in the period in which they become known.
The most significant items involving management’s estimates include estimates of benefits payable and risk adjustment. The impact of changes in estimates is recorded in the period in which they become known.
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. Premiums for quota share reinsurance are based on a percentage of premiums earned before ceded reinsurance.
In quota share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company’s losses in exchange for a corresponding percentage of premiums. In XOL reinsurance, the reinsurer agrees to assume all or a portion of the ceding company’s losses in excess of a specified amount.
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.
As of December 31, 2024 and December 31, 2023, total cash and cash equivalents and investments held by the holding company was $189.8 million and $234.1 million, respectively, of which $12.8 million and $12.6 million was restricted for 2024 and 2023, respectively.
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.
The risk score is used to adjust plan revenue to reflect the relative risk of the plan's enrolled population. We reevaluate our risk adjustment 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.
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.
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.
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.
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. Some of our payments and receipts, including risk adjustment transfers and reinsurance receipts, can be significant.
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 Revolving Credit Facility is currently guaranteed by Oscar Management Corporation, a wholly owned subsidiary of Oscar, and all of our future direct and indirect subsidiaries (subject to certain permitted exceptions) (the “Guarantors”), and is secured by a lien on substantially all of our and the Guarantors’ assets (subject to certain exceptions).
Our portfolio managers must obtain our prior approval before selling investments in a loss position. Net investment income (loss) for our health insurance subsidiaries was $146.7 million and $25.8 million for the year ended December 31, 2023 and 2022, respectively.
Professional portfolio managers operating under documented guidelines manage our investments and a portion of our cash equivalents. Our portfolio managers are directed to obtain our prior approval before selling investments in a loss position. Net investment income on a consolidated basis was $185.7 million and $155.4 million for the year ended December 31, 2024 and 2023, respectively.
Risk Adjustment The risk adjustment programs in the individual and small group markets we serve are designed to mitigate the potential impact of adverse selection and provide stability for health insurers. 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.
Risk Adjustment The risk adjustment programs in the individual and small group markets we serve are designed to mitigate the potential impact of adverse selection and provide stability for health insurers. 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.
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.
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. Furthermore, there 61 Table of Contents is also uncertainty associated with changes in other carriers operations, which may impact the ultimate degree of market level risk.
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.
Services and Other Services and other revenue includes primarily revenue earned from administrative services performed as part of the +Oscar platform, as well as sublease income. Medical Medical expense primarily consists of both paid and unpaid medical expenses incurred to provide medical services and products to our members.
The increase was primarily due to the sale and maturity of securities within our investment portfolio and a decrease in purchases of securities. Financing Activities Net cash provided by financing activities decreased $294.7 million to $6.4 million for the year ended December 31, 2023 compared to $301.1 million for the year ended December 31, 2022.
For the year ended December 31, 2024, net cash used in investing activities was $1,387.4 million as compared to $577.2 million net cash provided by investing activities for the same period in 2023. The change was primarily due to an increase in purchases of securities and a lower level of maturing investments.
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.
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.
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.
In developing our benefits payable estimates, we apply different estimation methods depending on the month for which incurred claims are being estimated.
Additional increase was attributable to the acceleration of the non-cash stock compensation expense associated with the cancellation of the Founders Awards. The increase was partially offset by lower distribution expenses.
This increase was driven by higher distribution, taxes and fees associated with higher membership year over year, partially offset by the impact of the acceleration of stock compensation expense associated with the cancellation of the Founders Awards in the first quarter of 2023.
Under this program, each plan is assigned a risk score based upon demographic information and current year claims information related to its members. The risk score is used to adjust plan revenue to reflect the relative risk of the plan's enrolled population.
Risk Adjustment The risk adjustment programs in the markets we serve are administered federally by CMS and are designed to mitigate the potential impact of adverse selection and provide stability for health insurers. Under this program, each plan is assigned a risk score based upon demographic information and current year claims information related to its members.
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.
Our investment policies are designed to provide liquidity, preserve capital, and optimize the total return on invested assets. These policies also align with the constraints of our credit agreement and state regulations governing the types of investments our health insurance subsidiaries can hold.
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").
Reinsurance We believe our reinsurance agreements help us achieve important goals for our business, including risk management and capital efficiency. Our reinsurance agreements are contracted under two different types of arrangements: quota share reinsurance contracts and XOL reinsurance contracts.
The Amended Credit Agreement provides for a revolving loan credit facility in the aggregate principal amount of $115 million.
The Amended Credit Agreement provides for a revolving loan credit facility (the “Revolving Credit Facility”) in the aggregate principal amount of $115 million, with proceeds to be used for general corporate purposes. Borrowings under the Revolving Credit Facility bear interest equal to, at our option, one of two variable rates plus an applicable margin.
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.
Long-Term Cash Requirements Our long-term cash requirements under our various contractual obligations and commitments include operating leases. We expect the cash required to meet our long-term obligations to be primarily generated through future cash flows from operations.
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.
See “-Adjusted EBITDA” below for a reconciliation to net income (loss), the most directly comparable GAAP measure, and "-Overview-Adjusted EBITDA" for information regarding our use of Adjusted EBITDA. Premium Premium revenue increased by $3,285.2 million, or 58% , for the year ended December 31, 2024, compared to the same period in 2023.
Corporate bonds have final maturities of a maximum of two years from the settlement date and a maximum of five years from the settlement date for U.S. Government obligations. Professional portfolio managers operating under documented guidelines manage our investments and a portion of our cash equivalents.
These investment policies require that our investments in U.S. corporate bonds and asset backed securities have final maturities of no more than five years from the date of issuance and U.S. federal and state government obligations have final maturities of no more than seven years from the settlement date.
(2) 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.
The reinsurance agreements do not relieve us of our primary medical claims incurred obligations. Refer to Note 11 - Reinsurance to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for a description of the accounting methods used to record our quota share reinsurance arrangements.
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.
Medical Expenses and MLR Medical expenses increased by $2,690.6 million, or 58%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to increased membership.
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.
The Revolving Credit Facility is available for us to borrow under until December 28, 2025, provided we are in compliance with the covenants contained therein, including financial covenants to maintain minimum thresholds related to direct policy premiums, consolidated Adjusted EBITDA (as defined in the Revolving Credit Facility), and liquidity, as well as a maximum medical loss ratio.
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.
Cash flows from financing activities include proceeds from the issuance of debt securities and proceeds from stock option exercises. For the year ended December 31, 2024, net cash provided by financing activities was $68.4 million compared to $6.4 million for the same period in 2023.
General and Administrative Expenses General and administrative expenses increased by $29.9 million, or 10%, to $339.7 million for the year ended December 31, 2023, from $309.8 million for the year ended December 31, 2022. The increase was primarily attributable to the acceleration of the non-cash stock compensation expense associated with the cancellation of the Founders Awards.
Selling, General and Administrative Expenses and SG&A Expense Ratio Selling, general and administrative expenses increased by $329.8 million, or 23%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
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.
We regularly review our Total Revenue, MLR, Selling, General and Administrative Expense Ratio (“SG&A Expense Ratio”), Net Income (loss) attributable to Oscar Health Inc., and Adjusted EBITDA, a non-GAAP financial metric, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, and make strategic decisions.
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.
Medical expense also reflects the net impact of our ceded reinsurance claims from XOL and run-off quota share reinsurance contracts accounted for under reinsurance accounting. Selling, General and Administrative Expenses Selling, general and administrative expenses primarily include distribution expenses, wages, benefits, costs of software and hardware, the impact of quota share reinsurance, stock-based compensation, and other administrative costs.
Removed
Powered by our own differentiated cloud-native 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.
Added
We have been challenging the status quo in the healthcare system since our founding in 2012, and are dedicated to making a healthier life accessible and affordable for all. Oscar serves individuals, families, and employees through the ACA and offers health technology solutions that power the healthcare industry through +Oscar.
Removed
In addition to supporting our insurance business, externalizing our technology under +Oscar technology platform enables us to power both providers and payors. Recent Developments, Trends and Other Factors Impacting Performance Change in Leadership On March 28, 2023, the Company announced that, effective April 3, 2023, Mark T.
Added
Our technology drives superior experiences, deep engagement, and high-value clinical care, earning us the trust of approximately 1.68 million effectuated members, as of December 31, 2024.
Removed
Bertolini would join the Company as Chief Executive Officer and a member of the Company’s Board of Directors. Mario Schlosser, the Company’s co-founder and former Chief Executive Officer, moved into the role of President of Technology, in which he focuses on continued innovation and expansion of the Company’s technology platform and developing related offerings for the healthcare ecosystem. Mr.
Added
We believe Total revenue is an important metric to assess the growth of our business, as well as the earnings potential of our investment portfolio. MLR MLR is a metric used to calculate medical expenses as a percentage of net premiums before ceded quota share reinsurance.
Removed
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.
Added
MLR in our existing products are subject to various federal and state minimum requirements. 59 Table of Contents SG&A Expense Ratio The SG&A Expense Ratio reflects the Company’s Selling, general and administrative expenses, as a percentage of Total revenue.
Removed
Specifically, reinsurance is a financial arrangement under which the reinsurer agrees to cover a portion of our medical claims (ceded claims) in return for a portion of the premium (premiums ceded). Our reinsurance agreements are contracted under two different types of arrangements: quota share reinsurance contracts and excess of loss ("XOL") reinsurance contracts.
Added
We believe the SG&A Expense Ratio is useful to evaluate our ability to manage our overall selling, general, and administrative cost base. Net Income (loss) attributable to Oscar Health, Inc. Net earnings (loss) allocated to the Company after income (loss) attributable to noncontrolling interests.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest 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.
Biggest changeInterest 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, 2024, the fair value of our investments would decrease by approximately $39.6 million .
Any declines in interest rates over time would reduce our investment income. 71 Table of Contents
Any declines in interest rates over time would reduce our investment income. 73 Table of Contents

Other OSCR 10-K year-over-year comparisons