Oscar Health's bold 2026 forecast sparks investor hope after years of decline

Oscar Health's stock climbed after the insurer set a 2026 revenue forecast above market expectations. The company, however, has faced a tough few years, shrinking its presence in multiple states and cutting membership by nearly 40% since 2023. Investors now watch whether its latest projections signal a turnaround or further challenges ahead.

The New York-based insurer has struggled since 2023, when federal subsidies for Affordable Care Act (ACA) plans were reduced. Competitors like Humana and Centene expanded their ACA offerings, while Oscar Health pulled back, exiting several state markets. By 2025, its membership had dropped from around 1.6 million to under 1 million, and rising medical costs pushed losses higher.

Financial results for 2025 showed mixed progress. Revenue reached $11.7 billion, up 28% year-over-year, but operational losses hit $396.4 million. In the fourth quarter alone, the company reported a $1.24 GAAP loss per share on $2.8 billion in revenue—missing analyst estimates by $310 million. The medical loss ratio, a key measure of profitability, also worsened, climbing to 87.4% in 2025 from 81.7% in 2024.

For 2026, Oscar Health projects a significant improvement. It expects a medical loss ratio of 82.4%–83.4%, a 450-basis point gain from 2025. The company also forecasts earnings of $250 million to $450 million on revenue between $18.7 billion and $19.0 billion, surpassing consensus. However, premiums will rise by an average of 28%, though the per-member monthly increase will be lower. The insurer anticipates higher churn in its Obamacare plans due to these price hikes and new CMS initiatives.

Oscar Health's 2026 outlook has lifted its stock, but its recent struggles remain evident. With membership down and losses persistent, the company's ability to meet its targets will depend on controlling medical costs and retaining customers. The coming year will test whether its strategic retreat and pricing adjustments can stabilise its position in a competitive market.