Oscar Health (OSCR) 2024 Wells Fargo Healthcare Conference summary

Business performance and guidance

• Core business fundamentals are strong, with utilization and administrative performance meeting expectations.

• Full-year guidance was reaffirmed, reflecting no unexpected changes in performance.

• SEP (Special Enrollment Period) growth has decelerated, aligning with long-term guidance for 2024.

• Guidance improvement was driven by favorable core performance, offset by higher-than-expected SEP volume and prior year development.

• SEP growth adds short-term MLR pressure but is expected to be a tailwind for 2025 as retained members normalize.

Market trends and growth outlook

• 2025 ACA market growth is expected to be around 15%, driven by Medicaid redetermination, gig economy expansion, and immigration.

• Plans to double the number of MSAs by 2027, potentially increasing addressable market to about 70%.

• Pricing for 2025 is expected to be at or above trend, with disciplined strategies to balance growth and margin.

• Market remains rational and stable, with both public and not-for-profit players maintaining long-term objectives.

Long-term targets and margin initiatives

• Long-term targets include reaching a 5% EBIT margin by 2027 and sustaining 20%+ revenue CAGR.

• Larger scale and improved top-line performance in 2024 and 2025 could accelerate progress toward these targets.

• Enhanced subsidies are a key growth driver; if they expire, a 15-20% membership decline is estimated, based on historical analysis.

• Any extension or compromise on subsidies would be upside to current long-term targets.