Shares of Oscar Health (OSCR) advanced approximately 3.3% in premarket trading on Tuesday, reaching $12.66, following the release of its fourth-quarter financial results and a forward-looking projection for 2026. The health insurance provider reported a net loss of $353 million for the quarter, which was wider than the previous period, alongside revenue of $2.81 billion. A critical metric for investors, the medical loss ratio, which measures medical expenses as a percentage of premium revenue, came in at 95.4% for the quarter.
Long-Term Financial Targets and Recent Performance
Despite the quarterly loss, the company's stock found support from its detailed 2026 outlook. Oscar Health forecasts revenue in the range of $18.7 billion to $19.0 billion for that year, with operating earnings projected between $250 million and $450 million. For the full year 2025, the company reported revenue of $11.70 billion and a net loss of approximately $443 million. Chief Executive Mark Bertolini characterized 2025 as a "reset year" for the individual insurance market, emphasizing that strategic adjustments have been implemented to steer the company back to operating profitability by 2026.
The latest quarterly figures fell short of Wall Street expectations. Oscar posted a loss per share of $1.24, missing the consensus estimate for a $0.89 loss. Revenue of $2.81 billion also trailed analyst projections, which had anticipated roughly $3.11 billion. This performance underscores the ongoing challenges in managing medical costs within the Affordable Care Act (ACA) exchange marketplace, where pricing is reset annually and slight shifts in member healthcare utilization can significantly impact profitability.
Regulatory Scrutiny and Financial Maneuvering
Amid its earnings release, a new regulatory headwind emerged. A Republican-led U.S. House Judiciary Committee issued subpoenas to Oscar Health and seven other major insurers, including Elevance Health (ELV), CVS Health (CVS), Centene (CNC), and Kaiser Permanente, as part of an investigation into ACA subsidy practices. The subpoenas demand records from 2020 through 2025 related to subsidy recipients and amounts, with a response deadline of February 23. This probe casts a broader spotlight on industry-wide enrollment and billing practices within the government-supported individual market.
In a separate financial development, Oscar Health disclosed it secured a new $475 million secured revolving credit facility with a three-year term, finalized on February 6. Such credit arrangements are commonly used by corporations to bolster liquidity and provide a financial backstop for operational needs. This facility may offer the company additional flexibility as it executes its strategic plan.
Market Context and Investor Focus
The central investment thesis for Oscar has long revolved around its ability to grow within the ACA exchanges while maintaining discipline over medical spending. The elevated medical loss ratio remains a point of vigilance for the market. Achieving the 2026 targets is contingent on the company successfully managing medical cost trends and navigating the ACA's risk adjustment system, which reallocates funds among insurers based on the health profile of their members. Unexpected swings in this mechanism can create volatility in margins.
As the market opened, investor attention was directed toward the company's scheduled commentary, with analysts seeking clarity on pricing strategies, the trajectory of medical costs, and the specific operational path to reach the 2026 earnings goal. Furthermore, the February 23 deadline for insurers to respond to the House committee subpoenas now looms as a significant date for the entire health insurance sector, potentially influencing regulatory perceptions and future policy discussions.
The interplay between Oscar's ambitious financial roadmap and the newly intensified regulatory scrutiny creates a complex backdrop for the stock. While the 2026 outlook provides a tangible goal for a return to profitability, the company must execute flawlessly on cost control and avoid any material disruptions from the ongoing congressional investigation. The premarket share movement reflects a market weighing these long-term prospects against immediate operational and regulatory challenges.