Oscar Health (OSCR) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Growth opportunities and market outlook

• Expects over 20% CAGR through 2027, with recent 69% growth outpacing the market's 30% using disciplined pricing and cost controls.

• Sees significant market expansion potential, especially if individuals over 100% FPL move from Medicaid to ACA plans.

• Plans to double market presence from 150 to 300 MSAs by 2027, with half of revenue growth from new markets.

• Maintains 2027 target of $2.25/share EBIT+ and 5% margins, not relying on enhanced subsidies or major ICHRA/AI contributions.

• Market growth for next year expected at 15%, with stable and rational pricing environments.

Utilization and cost trends

• Inpatient utilization is lower than expected; outpatient, especially ER visits, is higher, attributed to new SEP and immigrant members.

• Overall utilization and pharmacy trends are in line with expectations.

• SEP growth slowed as anticipated, with a 10% higher MLR for SEP members due to revenue timing, not medical costs.

• No major headwinds expected for 2024-2025; administrative and market expansion opportunities remain.

ICHRA and product innovation

• ICHRA pilots underway in small, middle, and large employer segments; small and large segments show most interest.

• Legislative changes in red states are being pursued to boost small employer ICHRA adoption.

• Focus on guiding employees to optimal plan selection to maximize value and employer savings.

• Broker engagement and exclusive relationships are key to scaling ICHRA.