Oscar Health (OSCR) The Baird 2024 Global Healthcare Conference summary

Year-to-date performance and growth outlook

• Core business performance has been strong, with utilization trends at or better than expectations.

• Significant SEP (Special Enrollment Period) growth led to updated guidance and a larger-than-expected membership base for 2024.

• Most Medicaid redeterminations are complete, with a tail of new ACA entrants expected in the back half of the year.

• SEP growth is driven by both Medicaid redetermination and other factors like enhanced subsidies and gig economy participation.

• Retention of SEP members is high, providing a strong starting point for 2025 growth.

Medical loss ratio (MLR) and profitability

• SEP members typically have MLRs about 10 points higher than open enrollment (OE) members due to limited risk score data.

• MLR for SEP lives is above 90%, while the core book is in the low 80s.

• As SEP members are retained into the next year, their MLRs align with the rest of the population, supporting improved profitability.

• Strong SEP growth is expected to be a tailwind for 2025 economic performance.

Long-term targets and growth strategy

• Long-term guidance assumes 20% revenue CAGR through 2027 and a 5% EBIT margin.

• Faster-than-expected growth could accelerate achievement of margin targets and enhance bargaining power.

• 2025 is expected to see outsized growth, with the company positioned to outperform the market.

• Even if the market shrinks post-2026, growth is expected from market expansion and new product offerings.