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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission File Number: 001-40154
____________________________________________________________
Oscar Health, Inc.
(Exact name of registrant as specified in its charter)
____________________________________________________________
Delaware46-1315570
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)
75 Varick Street, 5th FloorNew York, NY10013
  (Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (646) 403-3677
Former name, former address and former fiscal year, if changed since last report: N/A
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.00001 par value per shareOSCRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Class of StockShares Outstanding as of October 31, 2024
Class A Common Stock, par value $0.00001 per share211,754,816 
Class B Common Stock, par value $0.00001 per share35,514,201 


Oscar Health, Inc.
TABLE OF CONTENTS

Page
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements (unaudited)
Item 2.
Item 3.
Item 4.
PART II - OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.




FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding our future results of operations and financial position, risk adjustment transfer payments, industry, regulatory and business trends, our commercial arrangements, business strategy, plans and plan mix, membership and market growth, and our objectives for future operations.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following:

Our ability to execute our strategy and manage our growth effectively;
Our ability to retain and expand our member base;
Heightened competition in the markets in which we participate;
Our ability to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs;
Our ability to achieve or maintain profitability in the future;
Changes in federal or state laws or regulations, including changes with respect to the Patient Protection and Affordable Care Act (“ACA”) and any regulations enacted thereunder;
Our ability to comply with ongoing regulatory requirements, including capital reserve and surplus requirements and applicable performance standards;
Changes or developments in the health insurance markets in the United States, including passage and implementation of a law to create a single-payer or government-run health insurance program;
Our, or any of our vendors', ability to comply with laws, regulations, and standards related to the handling of information about individuals or applicable consumer protection laws;
Our ability to arrange for the delivery of quality care and maintain good relations with the physicians, hospitals, and other providers within and outside our provider networks;
Unanticipated results of or changes to risk adjustment programs;
Our ability to utilize quota share reinsurance to meet our capital and surplus requirements and protect against downside risk on medical claims;
Unfavorable or otherwise costly outcomes of lawsuits, audits, investigations, and claims that arise from the extensive laws and regulations to which we are subject;
Incurrence of data security breaches of our and our partners’ information and technology systems;
Our ability to attract and retain qualified personnel;
Our ability to detect and prevent material weaknesses or significant control deficiencies in our internal controls over financial reporting or other failure to maintain an effective system of internal controls;
Adverse publicity or other adverse consequences related to our dual class structure or “controlled company” status; and
The other risks and uncertainties described under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on February 15, 2024.
3


The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

This Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q should be read with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

4


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

Oscar Health, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share amounts)2024202320242023
Revenue
Premium$2,368,257 $1,392,082 $6,626,055 $4,295,674 
Investment income50,326 42,368 143,309 119,908 
Services and other4,899 5,541 15,764 15,629 
Total revenue
2,423,482 1,439,991 6,785,128 4,431,211 
Operating Expenses
Medical
2,003,979 1,163,194 5,267,475 3,436,785 
Selling, general, and administrative460,377 325,850 1,289,745 1,061,612 
Depreciation and amortization
7,500 9,191 22,912 22,952 
Total operating expenses
2,471,856 1,498,235 6,580,132 4,521,349 
Earnings (loss) from operations
(48,374)(58,244)204,996 (90,138)
Interest expense
5,815 6,130 17,708 18,386 
Other expenses (income)(1,877)414 173 8,132 
Earnings (loss) before income taxes
(52,312)(64,788)187,115 (116,656)
Income tax expense
2,076 915 7,709 4,100 
Net income (loss)
(54,388)(65,703)179,406 (120,756)
Less: Net income (loss) attributable to noncontrolling interests208 (305)427 (58)
Net income (loss) attributable to Oscar Health, Inc.$(54,596)$(65,398)$178,979 $(120,698)
Earnings (Loss) per Share
Basic
$(0.22)$(0.29)$0.75 $(0.55)
Diluted
$(0.22)$(0.29)$0.65 $(0.55)
Weighted Average Common Shares Outstanding
Basic
243,106 223,099 237,759 219,827 
Diluted
243,106 223,099 301,459 219,827 

See the accompanying Notes to Condensed Consolidated Financial Statements

5


Oscar Health, Inc.
Condensed Consolidated Statements of Comprehensive Income
(unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Net income (loss)$(54,388)$(65,703)$179,406 $(120,756)
Other comprehensive income (loss), net of tax:
   Net unrealized gains on securities available for sale28,676 2,403 24,742 5,262 
Comprehensive income (loss)(25,712)(63,300)204,148 (115,494)
Comprehensive income (loss) attributable to noncontrolling interests208 (305)427 (58)
Comprehensive income (loss) attributable to Oscar Health, Inc.$(25,920)$(62,995)$203,721 $(115,436)

See the accompanying Notes to Condensed Consolidated Financial Statements




6

Oscar Health, Inc.
Condensed Consolidated Balance Sheets
(unaudited)

(in thousands)
September 30, 2024December 31, 2023
Assets
Current Assets:
Cash and cash equivalents
$1,206,145 $1,870,315 
Short-term investments
503,784 689,833 
Premiums and accounts receivable (net of allowance for credit losses of $30,100 and $31,600)
300,635 201,269 
Risk adjustment transfer receivable
63,512 51,925 
Reinsurance recoverable
273,317 241,194 
    Other current assets20,661 6,564 
Total current assets
2,368,054 3,061,100 
Property, equipment, and capitalized software, net
66,631 61,930 
Long-term investments
1,933,892 365,309 
Restricted deposits
30,069 29,870 
Other assets
84,369 83,271 
Total assets
$4,483,015 $3,601,480 
Liabilities and Stockholders' Equity
Current Liabilities:
Benefits payable
$1,356,726 $965,986 
Risk adjustment transfer payable
1,083,880 1,056,941 
Premium deficiency reserve
1,444 5,776 
Unearned premiums
66,129 65,918 
Accounts payable and other liabilities
395,481 273,367 
Reinsurance payable
51,117 61,024 
Total current liabilities
2,954,777 2,429,012 
Long-term debt299,361 298,777 
Other liabilities63,537 67,574 
Total liabilities3,317,675 2,795,363 
Commitments and contingencies (Note 12)
Stockholders' Equity
Class A common stock ($0.00001 par value; 825,000 thousand shares authorized, 211,702 thousand and 193,875 thousand shares outstanding as of September 30, 2024 and December 31, 2023, respectively)
2 2 
Class B common stock ($0.00001 par value; 82,500 thousand shares authorized, 35,514 thousand shares outstanding as of September 30, 2024 and December 31, 2023, respectively)
  
Treasury stock (315 thousand shares as of September 30, 2024 and December 31, 2023)
(2,923)(2,923)
Additional paid-in capital
3,837,369 3,682,294 
Accumulated deficit
(2,697,736)(2,876,715)
Accumulated other comprehensive income
26,051 1,309 
Total Oscar Health, Inc. stockholders' equity1,162,763 803,967 
Noncontrolling interests2,577 2,150 
Total stockholders' equity
1,165,340 806,117 
Total liabilities and stockholders' equity
$4,483,015 $3,601,480 

See the accompanying Notes to Condensed Consolidated Financial Statements
7

Oscar Health, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Common stock, Class A shares
Balance, beginning of period206,153186,790193,875181,176 
Issuance of common stock from equity incentive plans5,5494,00617,8279,619 
Balance, end of period211,702190,796211,702190,796 
Common stock, Class B shares
    Balance, beginning of period35,51435,11635,51435,116 
    Issuance of common stock from equity incentive plans180180 
Balance, end of period35,51435,29635,51435,296 
Common stock, Class A
Balance, beginning of period$2 $2 $2 $2 
    Balance, end of period2 2 2 2 
Treasury stock
Balance, beginning of period(2,923)(2,923)(2,923)(2,923)
    Balance, end of period(2,923)(2,923)(2,923)(2,923)
Additional paid-in capital
    Balance, beginning of period3,786,885 3,620,766 3,682,294 3,509,007 
    Issuance of common stock from equity incentive plans18,560 300 64,571 2,886 
    Stock-based compensation expense31,924 30,449 90,504 139,151 
    Joint venture contribution— 2,020 — 2,491 
    Balance, end of period3,837,369 3,653,535 3,837,369 3,653,535 
Accumulated Deficit
    Balance, beginning of period(2,643,140)(2,661,287)(2,876,715)(2,605,987)
    Net income (loss)(54,596)(65,398)178,979 (120,698)
    Balance, end of period(2,697,736)(2,726,685)(2,697,736)(2,726,685)
Accumulated other comprehensive income (loss)
    Balance, beginning of period(2,625)(6,856)1,309 (9,715)
    Unrealized gains on investments, net28,676 2,403 24,742 5,262 
    Balance, end of period26,051 (4,453)26,051 (4,453)
Noncontrolling interests
    Balance, beginning of period2,369 2,263 2,150 2,016 
    Net income (loss) attributable to noncontrolling interests208 (305)427 (58)
    Balance, end of period2,577 1,958 2,577 1,958 
Total stockholders' equity$1,165,340 $921,434 $1,165,340 $921,434 

See the accompanying Notes to Condensed Consolidated Financial Statements
8

Oscar Health, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)

Nine Months Ended September 30,
(in thousands)20242023
Cash Flows from Operating Activities:
Net income (loss)
$179,406 $(120,756)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred taxes
(68)95 
Net realized loss on sale of financial instruments
2 70 
Depreciation and amortization expense
22,912 22,952 
Amortization of debt issuance costs583 583 
Stock-based compensation expense
83,969 133,541 
Net accretion of investments
(18,956)(22,856)
Change in provision for credit losses(1,500)12,000 
Changes in assets and liabilities:
(Increase) / decrease in:
Premiums and accounts receivable
(97,867)(2,622)
Risk adjustment transfer receivable
(11,587)(4,265)
Reinsurance recoverable
(32,123)615,084 
Other assets
(15,127)3,854 
Increase / (decrease) in:
Benefits payable
390,740 (27,278)
Unearned premiums
211 (7,396)
Premium deficiency reserve
(4,332)(4,035)
Accounts payable and other liabilities
118,079 (41,366)
Reinsurance payable
(9,907)(360,335)
Risk adjustment transfer payable
26,938 (766,297)
Net cash provided by (used in) operating activities
631,373 (569,027)
Cash Flows from Investing Activities:
Purchase of investments
(2,023,049)(622,183)
Sale of investments
21,188 26,656 
Maturity of investments
663,011 1,019,612 
Purchase of property, equipment and capitalized software
(21,078)(19,475)
Change in restricted deposits
3,942 100 
Net cash (used in) provided by investing activities
(1,355,986)404,710 
Cash Flows from Financing Activities:
Proceeds from joint venture contribution 2,491 
Proceeds from exercise of stock options
64,571 2,886 
Net cash provided by financing activities
64,571 5,377 
Decrease in cash, cash equivalents and restricted cash equivalents
(660,042)(158,940)
Cash, cash equivalents, restricted cash and cash equivalents—beginning of period
1,891,971 1,580,497 
Cash, cash equivalents, restricted cash and cash equivalents—end of period
1,231,929 1,421,557 
Cash and cash equivalents
1,206,145 1,399,791 
Restricted cash and cash equivalents included in restricted deposits
25,784 21,766 
Total cash, cash equivalents and restricted cash and cash equivalents
$1,231,929 $1,421,557 
Supplemental Disclosures:
Interest payments$22,480 $22,893 
Income tax payments$636 $1,000 

See the accompanying Notes to Condensed Consolidated Financial Statements
9


Oscar Health, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)
(in thousands, except per share amounts, or as otherwise stated herein)

1.    ORGANIZATION

Oscar Health, Inc., together with its subsidiaries (either individually or collectively referred to as "Oscar" or the "Company"), is a leading healthcare technology company, whose mission is to make a healthier life accessible and affordable for all. The Company’s Class A common stock is traded on the New York Stock Exchange under the symbol “OSCR”.

Oscar operates as one segment to sell insurance to its members through the federal and state-run healthcare exchanges formed in conjunction with the Patient Protection and Affordable Care Act and leverages its technology platform to provide services via its +Oscar offering. Individual plans are offered to individuals and families through Health Insurance Marketplaces. Small Group plans are offered to employees of companies with 50 - 100 full-time workers. The Company also partners with Cigna through the Cigna+Oscar partnership to serve the small group employer market. Oscar previously offered Medicare Advantage insurance coverage, but exited the Medicare Advantage market for plan year 2024.

The Company’s member-first philosophy and innovative approach to care has earned the trust of approximately 1.65 million members, as of September 30, 2024.

Non-Renewal of Cigna+Oscar Partnership and Exit from the Small Group Market

On March 26, 2024, the Company notified Cigna Health and Life Insurance Company that it is not renewing the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024. The parties will continue to offer their Cigna+Oscar Small Group product through December 15, 2024. Following termination of the arrangement on December 31, 2024, the Company will continue to provide transition and run-off services through December 31, 2026 and share proportionally in all premiums and claims for any Cigna+Oscar Small Group plan sold or issued on or before December 15, 2024, in accordance with the terms of the arrangement. Additionally, effective December 15, 2024, Oscar will no longer be offering small group products in any market.

Basis of Presentation

The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), and the applicable rules and regulations of the Securities and Exchange Commission for interim financial information. As such, these financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statements.

These Condensed Consolidated Financial Statements are unaudited; however, in the opinion of management, they reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the information presented in conformity with U.S. GAAP applicable for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of results for the full year or future periods. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2023.

Certain monetary amounts, percentages, and other figures included in this Quarterly Report on Form 10-Q have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report on Form 10-Q have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report on Form 10-Q may vary from those obtained by performing the same calculations using the figures in the Company's Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. Certain other amounts that appear in this Quarterly Report on Form 10-Q may not sum due to rounding.



10

Reclassification

With the commencement of the current fiscal year, the Company has made certain reclassifications to the income statement to provide more transparency into the Company’s streams of revenue and to increase comparability with peers. This reclassification has been applied retrospectively, and comparative figures for prior periods have been adjusted accordingly within the accompanying Condensed Consolidated Financial Statements and notes to the Condensed Consolidated Financial Statements. The reclassification does not affect the Company’s net income.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates inherent in the preparation of the accompanying interim Condensed Consolidated Financial Statements include healthcare costs incurred but not yet reported (“IBNR”) and risk adjustment transfers. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ materially from these estimates.

Accounting Pronouncements - Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07 ("ASU 2023-07"), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires, for each reportable segment, disclosure of significant segment expenses categories, other segment items, enhanced interim disclosures of certain segment-related disclosures that previously were only required annually, and other disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has evaluated the impact of the adoption of this guidance on the Consolidated Financial Statements and related disclosures. The Company believes the adoption of ASU 2023-07 will not have a material impact on the Company’s financial position but will result in additional segment footnote disclosures in the Company’s annual consolidated financial statements for the year ending December 31, 2024, as well as interim periods thereafter. More specifically, the Company will provide enhanced disclosures regarding the measure of profit or loss reviewed by the Chief Operating Decision Maker as well as enhanced expense disclosures.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and other amendments to improve the effectiveness of income tax disclosures. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements and related disclosures.

11

2.    REVENUE RECOGNITION

Premium

Premium revenue includes direct policy premiums collected from members and the federal government, assumed policy premiums received as part of the reinsurance arrangement under the Cigna+Oscar Small Group plan offering, and risk adjustment transfers. Premium revenue is net of ceded premium from excess of loss ("XOL") and run-off quota share reinsurance contracts accounted for under reinsurance accounting (See Note 9 - Reinsurance for additional information on the Company’s reinsurance contracts).

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Direct policy premiums$2,687,883 $1,548,571 $7,542,098 $4,796,819 
Assumed premiums55,062 57,836 173,134 174,166 
Risk adjustment transfers(374,828)(211,422)(1,077,121)(665,200)
Reinsurance premiums ceded140 (2,903)(12,056)(10,111)
Premium$2,368,257 $1,392,082 $6,626,055 $4,295,674 

The direct policy premiums received from Centers for Medicare & Medicaid Services ("CMS") for the three and nine months ended September 30, 2024 were $2,488.4 million and $6,952.3 million, respectively. For the three and nine months ended September 30, 2023, direct policy premiums received from CMS were $1,328.2 million and $4,113.0 million respectively.

Services and Other

The Company earns revenue as part of services performed via the +Oscar platform. Services revenue is recognized in the period the contractual performance obligations are satisfied and measured in an amount that reflects the consideration the Company expects to be entitled to in exchange for performing the services. The timing of the Company's revenue recognition may differ from the timing of payment by customers. A receivable is recorded to Premiums and accounts receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, deferred revenue is recorded to Accounts payable and other liabilities when payment is received before the performance obligations are satisfied. Other revenue includes primarily sublease income.

3.    INVESTMENTS

Net investment income was attributable to the following:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Fixed maturity securities$22,996 $15,987 $54,414 $46,219 
Cash equivalents25,986 24,874 84,659 69,691 
Other (1)
1,555 1,682 4,783 4,605 
Investment income50,537 42,543 143,856 120,515 
Investment expense
(211)(175)(547)(607)
Total
$50,326 $42,368 $143,309 $119,908 
(1) Represents the net interest earned on funds withheld.


As of September 30, 2024 and December 31, 2023, the Company recorded accrued investment income of $20.7 million and $6.6 million, respectively.





12



The following tables provide summaries of the Company's investments by major security type as of September 30, 2024 and December 31, 2023:
September 30, 2024
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair Value
U.S. treasury and agency securities
$1,891,092 $24,133 $(974)$1,914,251 
Corporate notes
481,698 3,019 (157)484,560 
Certificates of deposit
38,865   38,865 
Total
$2,411,655 $27,152 $(1,131)$2,437,676 

December 31, 2023
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair Value
U.S. treasury and agency securities
$802,288 $1,689 $(1,062)$802,915 
Corporate notes
234,908 854 (198)235,564 
Certificates of deposit
16,663   16,663 
Total
$1,053,859 $2,543 $(1,260)$1,055,142 

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position, by the length of time in which the securities have continuously been in that position, as of September 30, 2024 and December 31, 2023:
September 30, 2024
Less than 12 Months12 Months or Longer
(in thousands, except no. of securities)Number of SecuritiesFair ValueGross
Unrealized Losses
Number of SecuritiesFair ValueGross
Unrealized Losses
U.S. treasury and agency securities90 $455,067 $(910)6 $47,680 $(63)
Corporate notes75 99,362 (154)1 3,270 (4)
Total165 $554,429 $(1,064)$7 $50,950 $(67)

December 31, 2023
Less than 12 Months12 Months or Longer
(in thousands, except no. of securities)Number of SecuritiesFair ValueGross
Unrealized Losses
Number of SecuritiesFair ValueGross
Unrealized Losses
U.S. treasury and agency securities69 $480,312 $(995)4 $24,551 $(67)
Corporate notes64 79,024 (166)19 5,545 (32)
Total133 $559,336 $(1,161)23 $30,096 $(99)
13


The Company monitors available-for-sale debt securities for credit losses and recognizes an allowance for credit losses when factors indicate a decline in the fair value of a security is credit-related. Certain investments may experience a decline in fair value due to changes in market interest rates, changes in general economic conditions, or a deterioration in the credit worthiness of a security's issuer. For securities in an unrealized loss position that the Company does not intend to sell, the Company has assessed the gross unrealized losses during the period and determined an allowance for credit losses is not necessary because the declines in fair value are believed to be due to market fluctuations and not due to credit-related events.

The amortized cost and fair value of the Company's fixed maturity securities as of September 30, 2024 and December 31, 2023 by contractual maturity are shown below. Actual maturities of these securities could differ from their contractual maturities because issuers may have the right to call or prepay obligations, with or without penalties.

September 30, 2024December 31, 2023
(in thousands)
Amortized Cost
Fair Value
Amortized CostFair Value
Due in one year or less$502,534 $503,784 $690,694 $689,833 
Due after one year through five years1,909,121 1,933,892 363,165 365,309 
Total
$2,411,655 $2,437,676 $1,053,859 $1,055,142 


4.    FAIR VALUE MEASUREMENTS

Fair value represents the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The Company's financial assets and liabilities measured at fair value on a recurring basis are categorized into a three-level fair value hierarchy based on the priority of the inputs used in the fair value valuation technique.

The levels of the fair value hierarchy are as follows:

Level 1: Inputs utilize quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Inputs utilize quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations in which all significant inputs are observable in active markets.
Level 3: Inputs utilized are unobservable but significant to the fair value measurement for the asset or liability. The unobservable inputs are used to measure fair value to the extent relevant observable inputs are not available. The unobservable inputs typically reflect management’s own estimates about the assumptions a market participant would use in pricing the asset or liability.

The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis:

September 30, 2024
(in thousands)
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents
$95,844$$$95,844
Investments
U.S. treasury and agency securities
$ $1,914,251 $ $1,914,251 
Corporate notes
 484,560  484,560 
Certificates of deposit
 38,865  38,865 
Restricted investments
U.S. treasury securities
 4,285  4,285 
Total$95,844 $2,441,961 $ $2,537,805 

14

December 31, 2023
(in thousands)
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents$434,330 $ $ $434,330 
Investments
U.S. treasury and agency securities
$ $802,915 $ $802,915 
Corporate notes
 235,564  235,564 
Certificates of deposit
 16,663  16,663 
Restricted investments
   U.S. treasury securities 5,736  5,736 
Certificates of deposit$ $2,478 $ $2,478 
Total$434,330 $1,063,356 $ $1,497,686 

5.    RESTRICTED CASH AND RESTRICTED DEPOSITS

The Company maintains cash, cash equivalents and investments on deposit for its property leases or pledged to various state agencies in connection with its insurance licensure. The restricted cash and cash equivalents and restricted investments presented below are included in Restricted deposits in the accompanying Condensed Consolidated Balance Sheets.

(in thousands)September 30, 2024December 31, 2023
Restricted cash and cash equivalents$25,784 $21,656 
Restricted investments4,285 8,214 
Restricted deposits$30,069 $29,870 

15

6.    BENEFITS PAYABLE

Reserves for medical claims expenses are estimated using actuarial assumptions and recorded as Benefits payable liabilities on the Condensed Consolidated Balance Sheets. The assumptions for the estimates and for establishing the resulting liability are reviewed and any adjustments to reserves are reflected in the Condensed Consolidated Statements of Operations in the period in which the estimates are updated.

The following table provides a rollforward of the Company’s beginning and ending benefits payable and claims adjustment expenses ("CAE") payable balances for the nine months ended September 30, 2024 and 2023:

As of September 30, 2024
As of September 30, 2023
(in thousands)Benefits PayableUnallocated Claims
Adjustment Expense
TotalBenefits PayableUnallocated Claims
Adjustment Expense
Total
Benefits payable, beginning of the period$965,986 $13,192 $979,178 $937,727 $12,712 $950,439 
Less: Reinsurance recoverable57,111 — 57,111 277,944 — 277,944 
Benefits payable, beginning of the period, net$908,875 $13,192 $922,067 $659,783 $12,712 $672,495 
Claims incurred and CAE
Current year$5,388,787 $82,642 $5,471,429 $3,418,106 $68,814 $3,486,920 
Prior years(121,312) (121,312)18,679  18,679 
Total claims incurred and CAE, net$5,267,475 $82,642 $5,350,117 $3,436,785 $68,814 $3,505,599 
Claims paid and CAE
Current year$4,345,363 $68,013 $4,413,376 $2,737,037 $59,454 $2,796,491 
Prior years533,393 9,061 542,454 522,678 9,664 532,342 
Total claims and CAE paid, net$4,878,756 $77,074 $4,955,830 $3,259,715 $69,118 $3,328,833 
Benefits and CAE payable, end of period, net$1,297,594 $18,760 $1,316,354 $836,853 $12,408 $849,261 
Add: Reinsurance recoverable59,132 — 59,132 73,596 — 73,596 
Benefits and CAE payable, end of period$1,356,726 $18,760 $1,375,486 $910,449 $12,408 $922,857 

Amounts incurred related to prior periods vary from previously estimated liabilities as more claim information becomes available and claims are ultimately settled. The favorable development recognized in the nine months ended September 30, 2024 resulted primarily from lower than expected paid claims.



16


7.    DEBT

Convertible Senior Notes

As previously disclosed in Note 15 - Long-Term Debt, in our Annual Report on Form 10-K for the year ended December 31, 2023, in February 2022, the Company issued $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC and Tenere Capital LLC. The 2031 Notes are the Company's senior, unsecured obligations which bear interest at a rate of 7.25% per annum, payable in cash, semi-annually in arrears on June 30 and December 31 of each year, commencing on June 30, 2022. The 2031 Notes will mature on December 31, 2031, subject to earlier repurchase, redemption, or conversion.

The 2031 Notes are convertible into the Company's Class A common stock at an initial conversion rate of 120.1721 per $1,000 principal amount (equivalent to an initial conversion price of approximately $8.32 per share of Class A common stock), subject to customary adjustments upon the occurrence of certain events. During the quarterly period ended September 30, 2024, a conditional conversion feature of the 2031 Notes was satisfied when the last reported sales price per share of the Company’s common stock was greater than 130% of the conversion price of $8.32 per share for each of at least twenty (20) trading days during the period of thirty (30) consecutive trading days ending on, and including, the last trading day of the quarter. As a result, the 2031 Notes are convertible during the fourth quarter of 2024 at the option of the holder. As of the date of this Quarterly Report on Form 10-Q, the 2031 Notes have not been converted. Upon conversion, the 2031 Notes will be settled, at the Company's election, in shares of Class A common stock, cash, or a combination of cash and shares of Class A common stock, subject to certain exceptions.

As of September 30, 2024, the net carrying amount of the 2031 Notes was $299.4 million, with unamortized debt discount and issuance costs of $5.6 million. The estimated fair value of the 2031 Notes as of September 30, 2024 was $807.0 million. The Company classified the fair value of the 2031 Notes as a level 3 measurement due to the lack of observable market data over fair value inputs such as stock price volatility over the term of the 2031 Notes and the Company's cost of debt.

The following table presents the interest expense indicating an effective interest rate of 7.61% over the term of the 2031 Notes:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Coupon interest expense$5,344 $5,528 $16,400 $16,584 
Amortization of debt discount and issuance costs194 195 583 584 
Total interest expense$5,538 $5,723 $16,983 $17,168 

Revolving Credit Facility

As previously disclosed in Note 15 - Long-Term Debt, in our Annual Report on Form 10-K for the year ended December 31, 2023, on December 28, 2023, the Company entered into a third amendment to its senior secured credit agreement (the “Third Amendment”), with certain lenders (the “Lenders”) and Wells Fargo Bank, National Association, as administrative agent, which amended the senior secured credit agreement, dated as of February 21, 2021 (as amended by the Third Amendment, the “Amended Credit Agreement”). The Amended Credit Agreement provides for a revolving loan credit facility (the “Revolving Credit Facility”) in the aggregate principal amount of $115.0 million. The Revolving Credit Facility is guaranteed by Oscar Management Corporation, each wholly owned subsidiary of the Company, and all of the Company's future direct and indirect subsidiaries (in each case subject to certain permitted exceptions, including exceptions for certain guarantees (i) that would require material governmental consents or (ii) in respect of joint ventures). The Revolving Credit Facility is secured by substantially all of the Company’s and the guarantors’ assets (subject to certain exceptions). Proceeds are to be used solely for general corporate purposes of the Company.


17

The Company is permitted to increase commitments under the Revolving Credit Facility by an aggregate amount not to exceed $50.0 million, subject to certain conditions.

The Revolving Credit Facility is available until December 2025, provided the Company is in compliance with all covenants, including financial covenants to maintain minimum thresholds related to direct policy premiums, consolidated Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”), and liquidity, and a maximum medical loss ratio.

As of September 30, 2024, there were no outstanding borrowings under the Revolving Credit Facility.

8.    EARNINGS (LOSS) PER SHARE

Basic earnings per share is computed by dividing net income (loss) for the period by the weighted-average shares of common stock outstanding during the period. In periods when the Company is in a net loss position, potentially dilutive securities are excluded from the computation of diluted earnings per share because their inclusion would have an anti-dilutive effect. Thus, basic earnings per share is the same as diluted earnings per share.

During periods of net income, diluted earnings per share is calculated by adjusting net income for any interest charges and changes in the fair value of the bifurcated conversion option applicable to the convertible senior notes. This adjusted net income is then divided by the sum of the basic weighted-average shares of common stock and any dilutive potential common stock outstanding during the period, using the treasury stock method. Potential common stock includes the effect of outstanding dilutive stock options, restricted stock units, performance-based restricted stock units, as well as shares the Company could be obligated to issue from its convertible senior notes, as described in Note 7 - Debt, using the if-converted method. The calculation for basic and diluted earnings per share is as follows:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2024202320242023
Numerator:
Net income (loss) attributable to Oscar Health, Inc.$(54,596)$(65,398)$178,979 $(120,698)
Effect of convertible senior notes  17,459  
Net income (loss) available to Oscar Health, Inc.
common shareholders
$(54,596)$(65,398)$196,438 $(120,698)
Denominator:
Weighted average shares of common stock outstanding243,106223,099237,759219,827
Common stock equivalents27,048
Effect of convertible senior notes 36,652
Weighted average shares of common stock outstanding
and potential dilutive common shares outstanding
243,106 223,099 301,459 219,827 
Net Earnings (Loss) per Share
Basic
$(0.22)$(0.29)$0.75 $(0.55)
Diluted
$(0.22)$(0.29)$0.65 $(0.55)


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The following potential common shares were excluded from the computation of diluted net income (loss) per share attributable to Oscar Health, Inc. because including them would have had an anti-dilutive effect:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Stock options to purchase common stock
18,698 27,016 1,291 27,016 
Restricted stock units
16,040 25,206 369 25,206 
Performance-based restricted stock units7,453 9,350  9,350 
Shares underlying convertible notes (Note 7)36,653 36,652  36,652 
Total
78,844 98,224 1,660 98,224 

9.    REINSURANCE

The Company participates in quota share reinsurance to limit risk and capital requirements and XOL reinsurance to mitigate the exposure of high cost or catastrophic member risk. The quota share reinsurance arrangements are with more than one counterparty with multiple state-level treaties. The XOL reinsurance arrangements are with a private counterparty and federal and state-run programs. A summary of the Company's reinsurance agreements and related accounting treatment is included in Note 4 - Reinsurance, in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The Company also operates under an assumed reinsurance contract, under which the Company shares proportionally in all premiums and claims underwritten for the Cigna+Oscar Small Group offering.

Reinsurance Contracts Accounted for under Deposit Accounting

As of September 30, 2024 and December 31, 2023, a deposit liability balance of $13.2 million and $7.0 million, respectively, was recorded for the Company's quota share arrangements accounted for under deposit accounting and represents fees due to the reinsurer, which are recognized within Selling, general, and administrative expenses on the Consolidated Statements of Operations.

For the three and nine months ended September 30, 2024, the Company ceded 51% and 53% of its premium under reinsurance contracts accounted for under deposit accounting. For the three and nine months ended September 30, 2023, the Company ceded 45% and 46%, respectively, of its premium under reinsurance contracts accounted for under deposit accounting.

Reinsurance Contracts Accounted for under Reinsurance Accounting

Reinsurance accounting applies to quota share reinsurance contracts that are in runoff as well as the XOL treaties. Under reinsurance accounting, the Company records premium paid to the reinsurer as a reduction to premium revenue with a corresponding reinsurance payable. In the case of federal and state-run reinsurance programs, no reinsurance premiums are paid. Expected reimbursement from the reinsurer for claims incurred are recorded as a reduction to claims incurred with a corresponding reinsurance recoverable asset. The tables below present information for the Company's reinsurance arrangements accounted for under reinsurance accounting. Please see Note 2 - Revenue Recognition for total reinsurance premiums ceded and reinsurance premiums assumed, which are included as components of total Premium revenue in the Condensed Consolidated Statements of Operations.

The following table reconciles total Medical expenses to the amount presented in the Condensed Consolidated Statements of Operations:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Direct claims incurred
$1,986,189 $1,116,679 $5,189,901 $3,301,424 
Ceded reinsurance claims
(41,171)(15,266)(90,823)(33,833)
Assumed reinsurance claims
58,961 61,781 168,397 169,194 
Medical expenses
$2,003,979 $1,163,194 $5,267,475 $3,436,785 

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The Company records Selling, general and administrative ("SG&A") expenses net of reinsurance ceding commissions and assumed SG&A expenses. The following table reconciles total Selling, general and administrative expenses to the amount presented in the Condensed Consolidated Statements of Operations:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Selling, general and administrative expenses, gross
$459,522 $325,820 $1,289,362 $1,060,636 
Reinsurance ceding commissions
855 30 383 976 
Selling, general and administrative expenses
$460,377 $325,850 $1,289,745 $1,061,612 

The composition of the Reinsurance recoverable balance on the Condensed Consolidated Balance Sheets is as follows:

(in thousands)September 30, 2024December 31, 2023
Reinsurance premium and claim recoverables$272,478 $224,837 
Reinsurance ceding commissions6,915 7,054 
Experience refunds on reinsurance agreements(6,076)9,303 
Reinsurance recoverable$273,317 $241,194 

Credit Ratings

The financial condition of the Company's reinsurers is regularly evaluated to minimize exposure to significant losses. A key credit quality indicator for reinsurance is the financial strength ratings issued by the credit rating agencies, which provide an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. The Company’s reinsurers have most recently been issued financial strength ratings of A+ or higher.

The creditworthiness of each reinsurer is evaluated in order to assess counterparty credit risk and estimate an allowance for expected credit losses on the Company's reinsurance recoverable balances.

10.    BUSINESS ARRANGEMENTS

Variable Interest Entities

In the normal course of business, the Company entered into business arrangements with integrated health systems, as well as medical professional corporations that employ health care providers to deliver telemedical healthcare services to its covered member population in various states. The financial results of these entities are consolidated into the Company's financial statements.

The following table presents the collective assets and liabilities of the Company's variable interest entities:

(in thousands)September 30, 2024December 31, 2023
Assets$135,610 $125,709 
Liabilities$77,320 $74,568 


11.    RELATED PARTY TRANSACTIONS

In February 2022, the Company issued the 2031 Notes to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital Management, LLC, LionTree Investment Management, LLC and Tenere Capital LLC (collectively, the “Purchasers”). See Note 7 - Debt for additional information.
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12.    COMMITMENTS AND CONTINGENCIES

The Company’s current and past business practices are subject to review or other investigations by various state insurance and healthcare regulatory authorities and other state and federal regulatory authorities. These reviews focus on numerous facets of the Company’s business, including claims payment practices, statutory capital requirements, provider contracting, risk adjustment, competitive practices, commission payments, privacy issues, network adequacy, utilization management practices, pharmacy benefits, access to care, and sales practices, among others. Some of these reviews have historically resulted in fines imposed on the Company and some have required changes to certain of the Company’s practices. The Company continues to be subject to these reviews, which could result in additional fines or other sanctions being imposed on the Company or additional changes to certain of its practices.

The Company is also currently involved in, and may in the future from time to time become involved in, legal proceedings and other claims in the ordinary course of its business, including class actions and suits brought by the Company’s members, providers, commercial counterparties, employees, and other parties relating to the Company’s business, including management and administration of health benefit plans and other services. Such matters can include various employment claims, disputes regarding reinsurance arrangements, disputes relating to intellectual property and the Telephone Consumer Protection Act and class action lawsuits, or other claims relating to the performance of contractual and non-contractual obligations to providers, members, employer groups, and others, including, but not limited to, the alleged failure to properly pay in-network and out-of-network claims and challenges to the manner in which the Company processes claims, and claims alleging that the Company has engaged in unfair business practices.

In addition, on May 12, 2022, a securities class action lawsuit against the Company, certain of its directors and officers, and the underwriters that participated in the Company’s initial public offering ("IPO") was commenced in the United States District Court for the Southern District of New York, captioned Carpenter v. Oscar Health, Inc., et al., Case No. 1:22-CV-03885 (S.D.N.Y.) (the “Securities Action”). The initial complaint in the Securities Action asserted violations of Sections 11 and 15 of the Securities Act based on the Company’s purported failure to disclose in its IPO registration statement growing COVID-19 testing and treatment costs, the impact of significant Special Enrollment Period membership, and risk adjustment data validation results for 2019 and 2020. By Court orders dated September 27, 2022 and December 13, 2022, the Court appointed a lead plaintiff and lead counsel on behalf of the putative class. An amended complaint filed on December 6, 2022 asserts the same violations of Sections 11 and 15 of the Securities Act, but this time based on the Company’s alleged failure to disclose in its IPO registration statement purportedly inadequate controls and systems in connection with the risk adjustment data validation audit for 2019, alleging that this purported omission caused losses and damages for members of the putative class. The amended complaint seeks unspecified compensatory damages as well as interest, fees, and costs. On April 4, 2023, the Company moved to dismiss the amended complaint. Briefing on the motion was completed on July 7, 2023. The Company believes it has meritorious defenses to these claims. At this time, the Company cannot predict the outcome, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

The Company records liabilities for its reasonable estimates of probable losses resulting from these matters where appropriate. Estimates of losses resulting from legal and regulatory matters involving the Company are inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; or could result in a change in business practices. Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable that a loss may be incurred, the ultimate settlement of which could be material.

Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on Oscar's business, results of operations, financial condition or cash flows.

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13.    CANCELLATION OF FOUNDERS AWARDS

On March 28, 2023, the Company’s Co-Founders, Mario Schlosser (the Company’s President of Technology and Chief Technology Officer and former Chief Executive Officer) and Joshua Kushner (the Company’s Vice Chairman), recommended to the Company’s Board of Directors that they should cancel and terminate the applicable awards that were granted to them in connection with the Company’s Initial Public Offering (the “Founders Awards”). This recommendation was made in support of reducing the dilutive effects of equity awards granted on April 3, 2023, to Mark T. Bertolini in connection with his appointment as the Company’s Chief Executive Officer, effective April 3, 2023, and the Company’s annual employee equity awards granted in 2023. On March 28, 2023, Mr. Schlosser and Mr. Kushner each entered into an agreement to cancel and terminate his Founders Award, which consisted of performance-based restricted stock units covering 4,229,853 shares (for Mr. Schlosser) and 2,114,926 shares (for Mr. Kushner) of the Company’s Class A common stock. As a result of this cancellation, in March 2023 the Company recognized approximately $46.3 million of accelerated stock-based compensation expense that would have otherwise been recognized over the remaining vesting period of the awards. Stock-based compensation expense is included in the Selling, general and administrative line item on the Condensed Consolidated Statements of Operations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") included the Company's Annual Report on Form 10-K for the year ended December 31, 2023 that was filed with the SEC on February 15, 2024. Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "we," "us," "our," "Oscar," "Oscar Health, Inc," and the "Company" mean the business and operations of Oscar Health, Inc. and its consolidated subsidiaries.

Index to this MD&A

Management's Discussion and Analysis of Financial Condition and Results of Operations is comprised of the following sections:


Overview

Oscar Health, Inc. is a leading healthcare technology company, whose mission is to make a healthier life accessible and affordable for all. Our full stack technology platform refers to our differentiated cloud-native end-to-end technology solution, which connects our member-facing features, including our mobile application, website, and virtual care solutions with our back-office tools that span all critical healthcare insurance and technology domains, including member and provider data, utilization management, claims management, billing, and benefits. Our member-first philosophy and innovative approach to care has earned the trust of approximately 1.65 million members, as of September 30, 2024. We currently offer individual and family as well as small group plans and we offer services through +Oscar that utilize our full stack technology platform to power others within the healthcare space.
We regularly review our Total Revenue, Medical Loss Ratio (“MLR”), Selling, General and Administrative Expense Ratio (“SG&A Expense Ratio”), and Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”, a non-GAAP financial metric) to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, and make strategic decisions. We believe these operational and financial measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP.

Total Revenue

Total revenue includes Premium revenue, Investment income, and Services and other revenue. We believe Total revenue is an important metric to assess the growth of our business, as well as the earnings potential of our investment portfolio.

Premium revenue includes direct policy premiums collected from our members and from the federal government, risk adjustment transfers, and assumed policy premiums we receive as part of our reinsurance arrangement under our Cigna+Oscar Small Group plan offering, and is net of ceded premium from excess of loss ("XOL") and run-off quota share reinsurance contracts accounted for under reinsurance accounting. Investment income primarily includes investment income, interest earned, and gains (losses) on our investment portfolio. Services and other revenue includes primarily revenue earned from administrative services performed as part of the +Oscar platform, as well as sublease income.

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MLR

MLR is a metric used to calculate medical expenses as a percentage of net premiums before ceded quota share reinsurance. Medical expenses are the total expenses incurred by members in order to utilize health care services less any member cost sharing. These services include inpatient, outpatient, pharmacy, and physician costs. Medical claims also include fee-for-service claims, pharmacy benefits, capitation payments to providers, provider disputed claims, risk sharing arrangements with certain of our providers, and various other medical-related costs. The impact of the federal risk adjustment program is included in the denominator of our MLR. We believe MLR is an important metric to demonstrate the ratio of our costs to pay for healthcare of our members to the net premium before ceded reinsurance. MLR in our existing products are subject to various federal and state minimum requirements.

SG&A Expense Ratio

The SG&A Expense Ratio reflects the Company’s Selling, general and administrative expenses, as a percentage of Total revenue. Selling, general and administrative expenses primarily include distribution expenses, wages, benefits, costs of software and hardware, the impact of quota share reinsurance, stock-based compensation, and other administrative costs. We believe the SG&A Expense Ratio is useful to evaluate our ability to manage our overall selling, general, and administrative cost base.

Adjusted EBITDA

Adjusted EBITDA is defined as Net income (loss) for the Company and its consolidated subsidiaries before interest expense, income tax expense (benefit), and depreciation and amortization, as further adjusted for stock-based compensation and other items that are considered unusual or not representative of underlying trends of our business, where applicable for the period presented. We present Adjusted EBITDA because we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Adjusted EBITDA is a non-GAAP measure. Management believes that investors’ understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing our ongoing results of operations.

We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate Adjusted EBITDA in the same manner.

By providing this non-GAAP financial measure, together with a reconciliation to the most comparable U.S. GAAP measure, Net income (loss), we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for Net income (loss) or other financial statement data presented in our Condensed Consolidated Financial Statements as indicators of financial performance. A reconciliation of Adjusted EBITDA from Net income (loss) is provided under “Results of Operations-Adjusted EBITDA”.

Recent Developments, Trends and Other Factors Impacting Performance

Members

Our membership is measured as of a particular point in time and is concentrated in the individual market. Membership may vary throughout the year due to disenrollments, any Special Enrollment Periods (“SEP”), and other market dynamics that are in effect such as Medicaid redeterminations, other legislative or regulatory actions, or other factors that enable the overall market to grow or decline throughout the year.


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Risk Adjustment

The risk adjustment programs in the markets we serve are administered federally by Centers for Medicare & Medicaid Services (“CMS”) and are designed to mitigate the potential impact of adverse selection and provide stability for health insurers. Under this program, each plan is assigned a risk score based upon demographic information and current year claims information related to its members. The risk score is used to adjust plan revenue to reflect the relative risk of the plan's enrolled population. We reevaluate our risk adjustment transfer estimates as new information and market data becomes available until we receive the final reporting from CMS in later periods, up to twelve months in arrears.

Our risk adjustment transfer estimates are subject to a high degree of estimation and variability and are affected by the relative risk of our members, and in the case of the Patient Protection and Affordable Care Act ("ACA") risk adjustment program, relative to that of other insurers. There is a higher degree of uncertainty associated with estimates of risk adjustment transfers at the beginning of the policy year resulting from composition of the risk score being based on concurrent claim data. There is additional uncertainty for both markets and blocks of business that experience outsized growth, compounded by the lack of credible experience data on the newly enrolling population. Furthermore, there is also uncertainty associated with changes in other carriers operations, which may impact the ultimate degree of market level risk. Actual risk adjustment calculations and transfers could materially differ from our assumptions.

Claims Incurred

Our medical expenses are impacted by seasonal effects of medical costs such as the utilization of deductibles and out-of-pocket maximums over the course of the policy year, which shifts more costs to us in the second half of the year as we pay a higher proportion of covered claims costs, and the number of days and holidays in a given period. Our medical and pharmacy costs can also exhibit seasonality depending on selection effects or changes in the risk profile of our membership and the proportion of our membership that is new in the calendar year. The emergence of medical and pharmacy claims is influenced by the aforementioned drivers, and further mix shifts may continue to alter claims incurred patterns in future periods.

Seasonality

Our business is generally affected by the seasonal patterns of our member enrollment, medical expenses, and health plan mix shift and product design. SEP or other market dynamics that drive enrollment and/or mix changes throughout the year may impact the per member levels of premiums, claims, and/or risk adjustment transfers. Additionally, medical expenses have historically been highest towards the second half of the year due to a number of factors discussed above.

Reinsurance

We believe our reinsurance agreements help us achieve important goals for our business, including risk management, capital efficiency, and greater predictability in our earnings in the event of unexpected significant fluctuations in our MLR. Specifically, reinsurance is a financial arrangement under which the reinsurer agrees to cover a portion of our medical claims in return for a portion of the premium. Our reinsurance agreements are contracted under two different types of arrangements: quota share reinsurance contracts and XOL reinsurance contracts. Reinsurance agreements do not relieve us of our primary medical claims incurred obligations. Refer to Note 9 - Reinsurance included elsewhere in this Quarterly Report on Form 10-Q for a description of the accounting methods used to record our quota share reinsurance arrangements.


25

Regulatory Update

In December 2022, Congress passed the omnibus spending bill which delinked the Medicaid continuous coverage from the end of the public health emergency for COVID-19. Medicaid redeterminations were required to begin by April 1, 2023, and while most states initially anticipated completing unwinding-related renewals by mid-2024, many states have extended their unwinding timelines for several additional months, due to adoption of strategies to promote continuity of coverage for eligible individuals, pauses in procedural disenrollments, or other state-specific situations. CMS also previously announced an SEP that began March 31, 2023 and was expected to end July 31, 2024, but has been extended to November 30, 2024. While CMS guidance indicates that Medicaid redeterminations have been completed in certain states, CMS has recently announced that all unwinding-related renewals for beneficiaries enrolled in Medicaid or Children’s Health Insurance Program (“CHIP”) must be completed no later than December 31, 2025. We continue to expect that consumers’ transitions from Medicaid and CHIP coverage to ACA marketplace plans may contribute to additional growth in the ACA marketplace.

On July 19, 2024, in response to increases in unauthorized changes in consumers’ enrollments by agents and brokers, CMS introduced changes to the ACA broker Agent of Record process, tightening compliance by requiring brokers to follow stricter documentation protocols and obtain explicit consumer consent. We continue to monitor regulatory developments to address bad actors, including possible changes to eligibility or income verification requirements or increased enforcement of existing requirements by CMS.

Non-Renewal of Cigna+Oscar Partnership and Exit from Small Group Market

On March 26, 2024, the Company notified Cigna Health and Life Insurance Company that it is not renewing the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024. The parties will continue to offer their Cigna+Oscar Small Group product through December 15, 2024. Additionally, effective December 15, 2024, Oscar will no longer be offering small group products in any market. Refer to Note 1 - Organization - Non-Renewal of Cigna+Oscar Partnership and Exit from the Small Group Market included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Change Healthcare Incident

Change Healthcare (“CHC”), which provided claims clearinghouse and other services to the Company, experienced a cybersecurity incident on February 21, 2024. At this time, CHC has not notified the Company of any breach of our members’ data.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of the Company's significant accounting policies is included in Note 2 - Summary of Significant Accounting Policies, in our Annual Report on Form 10-K for the year ended December 31, 2023. Certain of our accounting policies are considered critical, as these policies require significant, difficult or complex judgments by management, often requiring the use of estimates about the effects of matters that are inherently uncertain. As of September 30, 2024, there were no significant changes to the critical accounting estimates from what was reported in our Annual Report on Form 10-K for the year ended December 31, 2023.








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Results of Operations

The following table sets forth our results of operations for the periods indicated:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except percentages)2024202320242023
Revenue
Premium$2,368,257 $1,392,082 $6,626,055 $4,295,674 
Investment income50,326 42,368 143,309 119,908 
Services and other4,899 5,541 15,764 15,629 
Total revenue2,423,482 1,439,991 6,785,128 4,431,211 
Operating Expenses
Medical2,003,979 1,163,194 5,267,475 3,436,785 
Selling, general, and administrative460,377 325,850 1,289,745 1,061,612 
Depreciation and amortization7,500 9,191 22,912 22,952 
Total operating expenses2,471,856 1,498,235 6,580,132 4,521,349 
Earnings (loss) from operations(48,374)(58,244)204,996 (90,138)
Interest expense5,815 6,130 17,708 18,386 
Other expenses (income)(1,877)414 173 8,132 
Earnings (loss) before income taxes(52,312)(64,788)187,115 (116,656)
Income tax expense2,076 915 7,709 4,100 
Net income (loss)$(54,388)$(65,703)$179,406 $(120,756)
Medical Loss Ratio (MLR)84.6 %83.8 %79.5 %80.0 %
SG&A Expense Ratio19.0 %22.6 %19.0 %24.0 %
Adjusted EBITDA$(11,563)$(20,285)$311,877 $66,355 


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Membership

We view the number of members enrolled in our health plans as an important metric to help evaluate and estimate revenue and market share. Additionally, the more members we enroll, the more data we have, which allows us to improve the functionality of our platform. The following table summarizes the Company’s membership by offering:

As of September 30,
Membership by Offering20242023
Individual and Small Group1,602,993 912,761 
Medicare Advantage— 1,840 
Cigna+Oscar (1)
51,291 68,559 
Total Members (2)
1,654,284 983,160 
(1) Represents total membership for our co-branded partnership with Cigna.
(2) A member covered under more than one of our health plans counts as a single member for the purposes of this metric.

Membership increased by 671,124, or 68%, as of September 30, 2024, compared to September 30, 2023. The increase in membership is a result of strong retention and new enrollments in existing and expansion markets further supported by ACA market growth in 2024. The increase was partially offset by a decrease in Cigna+Oscar members served and our exit from the Medicare Advantage market.

Premium

Premium revenue increased $976.2 million, or 70%, for the three months ended September 30, 2024, compared to the same period in 2023, and increased $2,330.4 million, or 54%, for the nine months ended September 30, 2024, compared to the same period in 2023. These increases were primarily driven by higher membership and rate increases, partially offset by higher risk adjustment transfers as a percentage of premiums.

Investment Income

Investment income increased $8.0 million, or 19%, for the three months ended September 30, 2024, compared to the same period in 2023, and increased $23.4 million, or 20%, for the nine months ended September 30, 2024, compared to the same period in 2023. These increases were due to a larger asset base, higher investment yields, and higher interest rates.
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Medical Expenses and MLR

Medical expenses increased $840.8 million, or 72%, for the three months ended September 30, 2024, compared to the same period in 2023, and increased $1,830.7 million, or 53%, for the nine months ended September 30, 2024, compared to the same period in 2023. These increases were primarily due to increased membership. MLR increased for the three months ended September 30, 2024, compared to the same period in 2023, due to modestly higher medical costs, primarily driven by higher SEP membership resulting in higher risk adjustment transfers as well as higher COVID-related costs, partially offset by favorable prior period development. MLR improved for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to favorable prior period development, partially offset by higher SEP membership resulting in higher risk adjustment transfers.

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except percentages)2024202320242023
Medical$2,003,979 $1,163,194 $5,267,475 $3,436,785 
Less: Ceded quota share reinsurance claims(1)
2,036 (4,870)(2,879)(1,221)
Net claims before ceded quota share reinsurance (A)
$2,001,942 $1,168,064 $5,270,353 $3,438,006 
Premium$2,368,257 $1,392,082 $6,626,055 $4,295,674 
Less: Ceded quota share reinsurance premiums (2)
2,971 (1,448)(1,865)(2,131)
Net premiums before ceded quota share reinsurance (B)
$2,365,286 $1,393,530 $6,627,920 $4,297,805 
Medical Loss Ratio (A divided by B)
84.6 %83.8 %79.5 %80.0 %
(1)Represents prior period development for claims ceded to reinsurers pursuant to quota share treaties accounted for under reinsurance accounting, which are in runoff.
(2)Represents prior period development for premiums ceded to reinsurers pursuant to quota share treaties accounted for under reinsurance accounting, which are in runoff.

Selling, General and Administrative Expenses and SG&A Expense Ratio

Selling, general and administrative expenses increased $134.5 million, or 41%, for the three months ended September 30, 2024, compared to the same period in 2023, and increased $228.1 million, or 21%, for the nine months ended September 30, 2024, compared to the same period in 2023. These increases were driven by higher distribution and selling expenses associated with higher membership year over year, partially offset by the impact of the acceleration of stock compensation expense associated with the cancellation of the Founders Awards in the first quarter of 2023. The SG&A Expense Ratio improved 360 basis points year over year, and 500 basis points year over year for the three and nine months ended September 30, 2024, respectively, primarily due to improved fixed cost leverage and variable cost efficiencies.

Depreciation and Amortization Expenses

Depreciation and amortization expenses decreased $1.7 million, or (18)%, for the three months ended September 30, 2024, compared to the same period in 2023. The decrease was due to less internally developed software placed into service.

Income Tax Expense (Benefit)

Our effective tax rate for the three months ended September 30, 2024 and 2023 was approximately (3.97)% and (1.41)%, respectively, and 4.12% and (3.51)% for the nine months ended September 30, 2024 and 2023, respectively.
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Adjusted EBITDA

The table below sets forth the reconciliation of Net income (loss) to Adjusted EBITDA:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Net income (loss)$(54,388)$(65,703)$179,406 $(120,756)
Interest expense5,815 6,130 17,708 18,386 
Other expenses (income)(1,877)414 173 8,132 
Income tax expense2,076 915 7,709 4,100 
Depreciation and amortization7,500 9,191 22,912 22,952 
Stock-based compensation(1)
29,311 28,768 83,969 133,541 
Adjusted EBITDA$(11,563)$(20,285)$311,877 $66,355 
(1)Represents non-cash expenses related to equity-based compensation programs, which vary from period to period depending on various factors including the timing, number, and the valuation of awards. The nine months ended September 30, 2023 includes a non-recurring charge of $46.3 million related to accelerated stock-based compensation expense recognized as a result of the cancellation of the Founders Awards. Refer to Note 13 - Cancellation of Founders Awards included elsewhere in this Quarterly Report on Form 10-Q for additional information.
30


Liquidity and Capital Resources

Overview

We maintain liquidity at two levels of our corporate structure, through our health insurance subsidiaries (any subsidiary of Oscar Health, Inc. that has applied for or received a license, certification or authorization to sell health plans by any state Department of Insurance, Department of Financial Services, Department of Health, or comparable regulatory authority) and through our holding company (our parent company, Oscar Health, Inc., on a standalone basis (“Parent”) and subsidiaries excluding our health insurance subsidiaries).

The majority of the assets held by the holding company are in the form of cash and cash equivalents and investments. As of September 30, 2024 and December 31, 2023, total cash and cash equivalents and investments held by the holding company was $260.1 million and $234.1 million, respectively, of which $12.7 million and $12.6 million was restricted for September 30, 2024 and December 31, 2023, respectively.

The majority of the assets held by our health insurance subsidiaries are in the form of cash and cash equivalents and investments. As of September 30, 2024 and December 31, 2023, total cash and cash equivalents and investments held by our health insurance subsidiaries was $3,413.8 million and $2,721.2 million, respectively, of which $17.3 million for both 2024 and 2023 was on deposit with regulators as required for statutory licensing purposes. These amounts are classified as restricted deposits on the balance sheet.

Our health insurance subsidiaries’ states of domicile have statutory minimum capital requirements that are intended to measure capital adequacy, taking into account the risk characteristics of an insurer’s investments and products. The combined statutory capital and surplus of our health insurance subsidiaries was $1,068.0 million and $800.6 million as of September 30, 2024 and December 31, 2023, respectively, which was in compliance with and in excess of the minimum capital requirements for each period. The health insurance subsidiaries historically have required capital contributions from Parent to maintain minimum levels. The health insurance subsidiaries may be subject to additional capital and surplus requirements in the future, as a result of factors such as increasing membership and medical costs, which may require us to incur additional indebtedness, sell capital stock, or access other sources of funding in order to fund such requirements. During periods of increased volatility, adverse securities and credit markets, including those due to rising interest rates, may exert downward pressure on the availability of liquidity and credit capacity for certain issuers, and any such funding may not be available on favorable terms, or at all.

As our health insurance subsidiaries have collectively become profitable and to the extent their levels of statutory capital and surplus continue to exceed minimum regulatory requirements, we may make periodic requests for dividends and distributions from our subsidiaries to fund our operations or seek to enter into transactions or structures that enable us to efficiently deploy this excess capital, which may or may not require approval by our regulators. The health insurance subsidiaries paid dividends, distributions, and loan repayments of $52.0 million to Parent in 2023. During the nine months ended September 30, 2024, our health insurance subsidiaries have issued dividends and made loan repayments of $133 million to Parent.

Our health insurance subsidiaries also utilize quota share reinsurance arrangements to reduce our minimum capital and surplus requirements, which are designed to enable us to efficiently deploy capital to fund our growth. During the nine months ended September 30, 2024 and September 30, 2023, Parent made $99.8 million and $16.5 million of capital contributions, respectively, to the health insurance subsidiaries. We estimate that had we not had any quota share reinsurance arrangements in place, the health insurance subsidiaries would have been required to hold approximately $520.0 million and $447.1 million of additional capital as of September 30, 2024 and December 31, 2023, respectively, which Parent would have been required to fund. The actual amount of any required capital contributions to our insurance subsidiaries may differ at any given time depending on each health insurance subsidiary’s capital adequacy.

31

Short-Term Cash Requirements
The Company’s cash requirements within the next twelve months include benefits payable, risk adjustment transfer payable, current lease liabilities, interest payable on debt, other current liabilities and purchase commitments and other obligations. We expect the cash required to meet these obligations to be primarily funded by cash available for general corporate use, cash flows from current operations, and/or the realization of current assets, such as accounts receivable. Based on our current forecast, we believe the Company's cash, and cash equivalents and investments, not including restricted cash, will be sufficient to fund our operating requirements for at least the next twelve months.

Our cash flows used in operations may differ substantially from our net loss due to non-cash charges or due to changes in balance sheet accounts. The timing of our cash flows from operating activities can also vary among periods due to the timing of payments made or received. Some of our payments and receipts, including risk adjustment transfers and reinsurance receipts, can be significant. For example, during the third quarter of 2024, we made a payment through our health insurance subsidiaries of approximately $1,056.8 million into the risk adjustment program for the 2023 policy year. As such, timing of payments and receipts can influence cash flows from operating activities in any given period which would have a negative impact on our operating cash flows.

Long-Term Cash Requirements
Our long-term cash requirements under our various contractual obligations and commitments include operating leases. We expect the cash required to meet our long-term obligations to be primarily generated through future cash flows from operations.

Convertible Senior Notes

During the quarterly period ended September 30, 2024, the conditional conversion feature of the 2031 Notes, which permits conversion upon satisfaction of the common stock sale price condition, was satisfied. As a result, the 2031 Notes are convertible during the fourth quarter of 2024 at the option of the holder. As of the date of this Quarterly Report on Form 10-Q, the 2031 Notes have not been converted. Upon conversion, the 2031 Notes will be settled, at the Company’s election, in shares of Class A common stock, cash, or a combination of cash and shares of Class A common stock, subject to certain exceptions.

Oscar may not redeem the 2031 Notes at the Company’s option prior to December 31, 2026.

For more information on our 2031 Notes, including the requirements for redemption, see in Note 15 - Long-Term Debt, in our Annual Report on Form 10-K for the year ended December 31, 2023, and, Note 7 – Debt to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Revolving Credit Facility

We have $115.0 million available to draw under our Revolving Credit Facility until December 2025, provided we are in compliance with all covenants. As of September 30, 2024, there were no outstanding borrowings under the Revolving Credit Facility. For more information on our Revolving Credit Facility, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility in our Annual Report on Form 10-K for the year ended December 31, 2023, and Note 7 – Debt to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.


32

Investments

We generally invest the cash of our health insurance subsidiaries in U.S. treasury and agency securities. We primarily invest the cash of the Company in investment-grade, marketable debt securities to improve our overall investment return. These investments are purchased pursuant to board-approved investment policies that reflect our obligations under our credit agreement and conform to applicable state laws and regulations.

Our investment policies are designed to provide liquidity, preserve capital, and maximize total return on invested assets, all in a manner consistent with state requirements that prescribe the types of instruments in which our health insurance subsidiaries may invest. These investment policies require that our investments of U.S. corporate bonds have final maturities of a maximum of two years from the settlement date and a maximum of five years from the settlement date for U.S. Government obligations. Professional portfolio managers operating under documented guidelines manage our investments and a portion of our cash equivalents. Our portfolio managers must obtain our prior approval before selling investments in a loss position. Net investment income for our health insurance subsidiaries was $47.8 million and $39.8 million for the three months ended September 30, 2024 and September 30, 2023, respectively, and $135.3 million and $114.0 million for the nine months ended September 30, 2024, and September 30, 2023, respectively.

Our restricted investments are invested principally in cash and cash equivalents and U.S. treasury securities; we have the ability to hold such restricted investments until maturity. The Company maintains cash and cash equivalents and investments on deposit or pledged to various state agencies as a condition for licensure. We classify our restricted deposits as long-term given the requirement to maintain such assets on deposit with regulators.

Summary of Cash Flows

Our primary operating cash flow sources are premiums and investment income. Our primary operating cash flow uses are payments for claims, risk adjustment transfers, and operating expenses, including interest expense. For the nine months ended September 30, 2024, net cash provided by operating activities was $631.4 million as compared with $569.0 million used in operating activities for the same period in 2023. The increase was primarily due to higher premiums received, which were partially offset by higher claim disbursements.

Cash flows from investing activities primarily include the purchase and disposition of financial instruments. For the nine months ended September 30, 2024, net cash used in investing activities was $1,356.0 million as compared to net cash provided by investing activities of $404.7 million for the same period in 2023. The change was primarily due to an increase in purchases of securities and a lower level of maturing investment.

Cash flows from financing activities may include proceeds from the issuance of debt securities and proceeds from stock option exercises. For the nine months ended September 30, 2024, net cash provided by financing activities was $64.6 million as compared to $5.4 million for the same period in 2023. The increase was primarily due to proceeds received from the exercise of stock options.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily attributable to potential changes in interest rates and/or inflation and the resulting impact on investment income and interest expense. We do not hold financial instruments for trading purposes.

Interest Rate Risk

We are subject to interest rate risk in connection with the fair value of our investment portfolio, which consists of U.S. treasury and agency securities, corporate notes, and certificates of deposit. Our primary market risk exposure is driven by changes to prime rate-based interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors, and other factors beyond our control. Assuming a hypothetical and immediate 1% increase in interest rates at September 30, 2024, the fair value of our investments would decrease by approximately $44.1 million. Any declines in interest rates over time would reduce our investment income.
33


Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2024 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.


PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The information required under this Part II, Item 1 is set forth in Note 12 - Commitments and Contingencies to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, results of operations, financial condition or cash flows.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.




34


Item 5. Other Information

(a) None.

(b) None.

(c) On September 27, 2024, Alessandrea Quane, the Company’s Chief Insurance Officer, entered into a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 211,774 shares of the Company’s Class A common stock by August 29, 2025.


Item 6. Exhibits

Incorporated by ReferenceFiled/
Furnished
Herewith
Exhibit
Number
Exhibit DescriptionFormFile No.ExhibitFiling
Date
3.18-K001-401543.13/8/2021
3.28-K001-401543.23/8/2021
4.1S-1/A333-2528094.12/22/2021
31.1*
31.2*
32.1**
32.2**
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document*
101.SCHInline XBRL Taxonomy Extension Schema Document*
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document*
101.LABInline XBRL Taxonomy Extension Label Linkbase Document*
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document*
104Cover Page Interactive Data File (formatted as Inline XBRL and embedded within Exhibit 101) *

*    Filed herewith.
**    Furnished herewith.
35

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

OSCAR HEALTH, INC.
Date: November 7, 2024
By:/s/ Mark T. Bertolini
Mark T. Bertolini
Chief Executive Officer
(Principal Executive Officer)
Date: November 7, 2024
By:/s/ R. Scott Blackley
R. Scott Blackley
Chief Financial Officer
(Principal Financial Officer)
Date: November 7, 2024
By:/s/ Victoria Baltrus
Victoria Baltrus
Chief Accounting Officer
(Principal Accounting Officer)
36

Exhibit 31.1
CERTIFICATION
I, Mark T. Bertolini, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Oscar Health, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2024
By:
/s/ Mark T. Bertolini
Mark T. Bertolini
Chief Executive Officer
(Principal Executive Officer)


Exhibit 31.2
CERTIFICATION
I, R. Scott Blackley, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Oscar Health, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2024
By:
/s/ R. Scott Blackley
R. Scott Blackley
Chief Financial Officer
(Principal Financial Officer)



Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Oscar Health, Inc. (the “Company”) for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2024
By:
/s/ Mark T. Bertolini
Mark T. Bertolini
Chief Executive Officer
(Principal Executive Officer)



Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Oscar Health, Inc. (the “Company”) for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2024
By:
/s/ R. Scott Blackley
R. Scott Blackley
Chief Financial Officer
(Principal Financial Officer)

v3.24.3
Cover - shares
9 Months Ended
Sep. 30, 2024
Oct. 31, 2024
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 001-40154  
Entity Registrant Name Oscar Health, Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 46-1315570  
Entity Address, Address Line One 75 Varick Street, 5th Floor  
Entity Address, City or Town New York,  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10013  
City Area Code (646)  
Local Phone Number 403-3677  
Title of 12(b) Security Class A Common Stock, $0.00001 par value per share  
Trading Symbol OSCR  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Central Index Key 0001568651  
Common Class A    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   211,754,816
Common Class B    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   35,514,201
v3.24.3
Condensed Consolidated Statements of Operations - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue        
Premium $ 2,368,257 $ 1,392,082 $ 6,626,055 $ 4,295,674
Investment income 50,326 42,368 143,309 119,908
Services and other 4,899 5,541 15,764 15,629
Total revenue 2,423,482 1,439,991 6,785,128 4,431,211
Operating Expenses        
Medical 2,003,979 1,163,194 5,267,475 3,436,785
Selling, general, and administrative 460,377 325,850 1,289,745 1,061,612
Depreciation and amortization 7,500 9,191 22,912 22,952
Total operating expenses 2,471,856 1,498,235 6,580,132 4,521,349
Earnings (loss) from operations (48,374) (58,244) 204,996 (90,138)
Interest expense 5,815 6,130 17,708 18,386
Other expenses (income) (1,877) 414 173 8,132
Earnings (loss) before income taxes (52,312) (64,788) 187,115 (116,656)
Income tax expense 2,076 915 7,709 4,100
Net income (loss) (54,388) (65,703) 179,406 (120,756)
Less: Net income (loss) attributable to noncontrolling interests 208 (305) 427 (58)
Net income (loss) attributable to Oscar Health, Inc. $ (54,596) $ (65,398) $ 178,979 $ (120,698)
Earnings (Loss) per Share        
Basic (in dollars per share) $ (0.22) $ (0.29) $ 0.75 $ (0.55)
Diluted (in dollars per share) $ (0.22) $ (0.29) $ 0.65 $ (0.55)
Weighted Average Common Shares Outstanding        
Basic (in shares) 243,106,000 223,099,000 237,759,000 219,827,000
Diluted (in shares) 243,106,000 223,099,000 301,459,000 219,827,000
v3.24.3
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ (54,388) $ (65,703) $ 179,406 $ (120,756)
Other comprehensive income (loss), net of tax:        
Unrealized gains on investments, net 28,676 2,403 24,742 5,262
Comprehensive income (loss) (25,712) (63,300) 204,148 (115,494)
Comprehensive income (loss) attributable to noncontrolling interests 208 (305) 427 (58)
Comprehensive income (loss) attributable to Oscar Health, Inc. $ (25,920) $ (62,995) $ 203,721 $ (115,436)
v3.24.3
Condensed Consolidated Balance Sheets - USD ($)
shares in Thousands, $ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Current Assets:    
Cash and cash equivalents $ 1,206,145 $ 1,870,315
Short-term investments 503,784 689,833
Premiums and accounts receivable (net of allowance for credit losses of $30,100 and $31,600) 300,635 201,269
Risk adjustment transfer receivable 63,512 51,925
Reinsurance recoverable 273,317 241,194
Other current assets 20,661 6,564
Total current assets 2,368,054 3,061,100
Property, equipment, and capitalized software, net 66,631 61,930
Long-term investments 1,933,892 365,309
Restricted deposits 30,069 29,870
Other assets 84,369 83,271
Total assets 4,483,015 3,601,480
Current Liabilities:    
Benefits payable 1,356,726 965,986
Risk adjustment transfer payable 1,083,880 1,056,941
Premium deficiency reserve 1,444 5,776
Unearned premiums 66,129 65,918
Accounts payable and other liabilities 395,481 273,367
Reinsurance payable 51,117 61,024
Total current liabilities 2,954,777 2,429,012
Long-term debt 299,361 298,777
Other liabilities 63,537 67,574
Total liabilities 3,317,675 2,795,363
Commitments and contingencies (Note 12)
Stockholders' Equity    
Treasury stock (315 thousand shares as of September 30, 2024 and December 31, 2023) (2,923) (2,923)
Additional paid-in capital 3,837,369 3,682,294
Accumulated deficit (2,697,736) (2,876,715)
Accumulated other comprehensive income 26,051 1,309
Total Oscar Health, Inc. stockholders' equity 1,162,763 803,967
Noncontrolling interests 2,577 2,150
Total stockholders' equity 1,165,340 806,117
Total liabilities and stockholders' equity $ 4,483,015 $ 3,601,480
Treasury stock (in shares) 315 315
Common Class A    
Stockholders' Equity    
Common stock $ 2 $ 2
Common stock, shares outstanding (in shares) 211,702 193,875
Common Class B    
Stockholders' Equity    
Common stock $ 0 $ 0
Common stock, shares outstanding (in shares) 35,514 35,514
v3.24.3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
shares in Thousands, $ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Premiums and accounts receivable, allowance for credit losses $ 30,100 $ 31,600
Treasury stock (in shares) 315 315
Common Class A    
Common stock, par value (in dollars per share) $ 0.00001 $ 0.00001
Common stock, shares authorized (in shares) 825,000 825,000
Common stock, shares outstanding (in shares) 211,702 193,875
Common Class B    
Common stock, par value (in dollars per share) $ 0.00001 $ 0.00001
Common stock, shares authorized (in shares) 82,500 82,500
Common stock, shares outstanding (in shares) 35,514 35,514
v3.24.3
Condensed Consolidated Statements of Stockholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Treasury stock
Additional paid-in capital
Accumulated Deficit
Accumulated other comprehensive income (loss)
Noncontrolling interests
Common Class A
Common Stock
Common Class B
Common Stock
Balance, beginning of period (in shares) at Dec. 31, 2022             181,176 35,116
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock from equity incentive plans (in shares)             9,619 180
Balance, end of period (in shares) at Sep. 30, 2023             190,796 35,296
Balance, beginning of period at Dec. 31, 2022   $ (2,923) $ 3,509,007 $ (2,605,987) $ (9,715) $ 2,016 $ 2  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock from equity incentive plans     2,886          
Stock-based compensation expense     139,151          
Joint venture contribution     2,491          
Net income (loss) $ (120,756)     (120,698)   (58)    
Unrealized gains on investments, net 5,262       5,262      
Balance, end of period at Sep. 30, 2023 921,434 (2,923) 3,653,535 (2,726,685) (4,453) 1,958 $ 2  
Balance, beginning of period (in shares) at Jun. 30, 2023             186,790 35,116
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock from equity incentive plans (in shares)             4,006 180
Balance, end of period (in shares) at Sep. 30, 2023             190,796 35,296
Balance, beginning of period at Jun. 30, 2023   (2,923) 3,620,766 (2,661,287) (6,856) 2,263 $ 2  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock from equity incentive plans     300          
Stock-based compensation expense     30,449          
Joint venture contribution     2,020          
Net income (loss) (65,703)     (65,398)   (305)    
Unrealized gains on investments, net 2,403       2,403      
Balance, end of period at Sep. 30, 2023 921,434 (2,923) 3,653,535 (2,726,685) (4,453) 1,958 $ 2  
Balance, beginning of period (in shares) at Dec. 31, 2023             193,875 35,514
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock from equity incentive plans (in shares)             17,827  
Balance, end of period (in shares) at Sep. 30, 2024             211,702 35,514
Balance, beginning of period at Dec. 31, 2023 806,117 (2,923) 3,682,294 (2,876,715) 1,309 2,150 $ 2  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock from equity incentive plans     64,571          
Stock-based compensation expense     90,504          
Net income (loss) 179,406     178,979   427    
Unrealized gains on investments, net 24,742       24,742      
Balance, end of period at Sep. 30, 2024 1,165,340 (2,923) 3,837,369 (2,697,736) 26,051 2,577 $ 2  
Balance, beginning of period (in shares) at Jun. 30, 2024             206,153 35,514
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock from equity incentive plans (in shares)             5,549  
Balance, end of period (in shares) at Sep. 30, 2024             211,702 35,514
Balance, beginning of period at Jun. 30, 2024   (2,923) 3,786,885 (2,643,140) (2,625) 2,369 $ 2  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock from equity incentive plans     18,560          
Stock-based compensation expense     31,924          
Net income (loss) (54,388)     (54,596)   208    
Unrealized gains on investments, net 28,676       28,676      
Balance, end of period at Sep. 30, 2024 $ 1,165,340 $ (2,923) $ 3,837,369 $ (2,697,736) $ 26,051 $ 2,577 $ 2  
v3.24.3
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash Flows from Operating Activities:    
Net income (loss) $ 179,406 $ (120,756)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Deferred taxes (68) 95
Net realized loss on sale of financial instruments 2 70
Depreciation and amortization expense 22,912 22,952
Amortization of debt issuance costs 583 583
Stock-based compensation expense 83,969 133,541
Net accretion of investments (18,956) (22,856)
Change in provision for credit losses (1,500) 12,000
(Increase) / decrease in:    
Premiums and accounts receivable (97,867) (2,622)
Risk adjustment transfer receivable (11,587) (4,265)
Reinsurance recoverable (32,123) 615,084
Other assets (15,127) 3,854
Increase / (decrease) in:    
Benefits payable 390,740 (27,278)
Unearned premiums 211 (7,396)
Premium deficiency reserve (4,332) (4,035)
Accounts payable and other liabilities 118,079 (41,366)
Reinsurance payable (9,907) (360,335)
Risk adjustment transfer payable 26,938 (766,297)
Net cash provided by (used in) operating activities 631,373 (569,027)
Cash Flows from Investing Activities:    
Purchase of investments (2,023,049) (622,183)
Sale of investments 21,188 26,656
Maturity of investments 663,011 1,019,612
Purchase of property, equipment and capitalized software (21,078) (19,475)
Change in restricted deposits 3,942 100
Net cash (used in) provided by investing activities (1,355,986) 404,710
Cash Flows from Financing Activities:    
Proceeds from joint venture contribution 0 2,491
Proceeds from exercise of stock options 64,571 2,886
Net cash provided by financing activities 64,571 5,377
Decrease in cash, cash equivalents and restricted cash equivalents (660,042) (158,940)
Cash, cash equivalents, restricted cash and cash equivalents—beginning of period 1,891,971 1,580,497
Cash, cash equivalents, restricted cash and cash equivalents—end of period 1,231,929 1,421,557
Cash and cash equivalents 1,206,145 1,399,791
Restricted cash and cash equivalents included in restricted deposits 25,784 21,766
Total cash, cash equivalents and restricted cash and cash equivalents 1,231,929 1,421,557
Supplemental Disclosures:    
Interest payments 22,480 22,893
Income tax payments $ 636 $ 1,000
v3.24.3
ORGANIZATION
9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION ORGANIZATION
Oscar Health, Inc., together with its subsidiaries (either individually or collectively referred to as "Oscar" or the "Company"), is a leading healthcare technology company, whose mission is to make a healthier life accessible and affordable for all. The Company’s Class A common stock is traded on the New York Stock Exchange under the symbol “OSCR”.

Oscar operates as one segment to sell insurance to its members through the federal and state-run healthcare exchanges formed in conjunction with the Patient Protection and Affordable Care Act and leverages its technology platform to provide services via its +Oscar offering. Individual plans are offered to individuals and families through Health Insurance Marketplaces. Small Group plans are offered to employees of companies with 50 - 100 full-time workers. The Company also partners with Cigna through the Cigna+Oscar partnership to serve the small group employer market. Oscar previously offered Medicare Advantage insurance coverage, but exited the Medicare Advantage market for plan year 2024.

The Company’s member-first philosophy and innovative approach to care has earned the trust of approximately 1.65 million members, as of September 30, 2024.

Non-Renewal of Cigna+Oscar Partnership and Exit from the Small Group Market

On March 26, 2024, the Company notified Cigna Health and Life Insurance Company that it is not renewing the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024. The parties will continue to offer their Cigna+Oscar Small Group product through December 15, 2024. Following termination of the arrangement on December 31, 2024, the Company will continue to provide transition and run-off services through December 31, 2026 and share proportionally in all premiums and claims for any Cigna+Oscar Small Group plan sold or issued on or before December 15, 2024, in accordance with the terms of the arrangement. Additionally, effective December 15, 2024, Oscar will no longer be offering small group products in any market.

Basis of Presentation

The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), and the applicable rules and regulations of the Securities and Exchange Commission for interim financial information. As such, these financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statements.

These Condensed Consolidated Financial Statements are unaudited; however, in the opinion of management, they reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the information presented in conformity with U.S. GAAP applicable for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of results for the full year or future periods. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2023.

Certain monetary amounts, percentages, and other figures included in this Quarterly Report on Form 10-Q have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report on Form 10-Q have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report on Form 10-Q may vary from those obtained by performing the same calculations using the figures in the Company's Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. Certain other amounts that appear in this Quarterly Report on Form 10-Q may not sum due to rounding.
Reclassification

With the commencement of the current fiscal year, the Company has made certain reclassifications to the income statement to provide more transparency into the Company’s streams of revenue and to increase comparability with peers. This reclassification has been applied retrospectively, and comparative figures for prior periods have been adjusted accordingly within the accompanying Condensed Consolidated Financial Statements and notes to the Condensed Consolidated Financial Statements. The reclassification does not affect the Company’s net income.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates inherent in the preparation of the accompanying interim Condensed Consolidated Financial Statements include healthcare costs incurred but not yet reported (“IBNR”) and risk adjustment transfers. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ materially from these estimates.

Accounting Pronouncements - Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07 ("ASU 2023-07"), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires, for each reportable segment, disclosure of significant segment expenses categories, other segment items, enhanced interim disclosures of certain segment-related disclosures that previously were only required annually, and other disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has evaluated the impact of the adoption of this guidance on the Consolidated Financial Statements and related disclosures. The Company believes the adoption of ASU 2023-07 will not have a material impact on the Company’s financial position but will result in additional segment footnote disclosures in the Company’s annual consolidated financial statements for the year ending December 31, 2024, as well as interim periods thereafter. More specifically, the Company will provide enhanced disclosures regarding the measure of profit or loss reviewed by the Chief Operating Decision Maker as well as enhanced expense disclosures.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and other amendments to improve the effectiveness of income tax disclosures. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements and related disclosures.
v3.24.3
REVENUE RECOGNITION
9 Months Ended
Sep. 30, 2024
Insurance [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION
Premium

Premium revenue includes direct policy premiums collected from members and the federal government, assumed policy premiums received as part of the reinsurance arrangement under the Cigna+Oscar Small Group plan offering, and risk adjustment transfers. Premium revenue is net of ceded premium from excess of loss ("XOL") and run-off quota share reinsurance contracts accounted for under reinsurance accounting (See Note 9 - Reinsurance for additional information on the Company’s reinsurance contracts).

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Direct policy premiums$2,687,883 $1,548,571 $7,542,098 $4,796,819 
Assumed premiums55,062 57,836 173,134 174,166 
Risk adjustment transfers(374,828)(211,422)(1,077,121)(665,200)
Reinsurance premiums ceded140 (2,903)(12,056)(10,111)
Premium$2,368,257 $1,392,082 $6,626,055 $4,295,674 

The direct policy premiums received from Centers for Medicare & Medicaid Services ("CMS") for the three and nine months ended September 30, 2024 were $2,488.4 million and $6,952.3 million, respectively. For the three and nine months ended September 30, 2023, direct policy premiums received from CMS were $1,328.2 million and $4,113.0 million respectively.

Services and Other

The Company earns revenue as part of services performed via the +Oscar platform. Services revenue is recognized in the period the contractual performance obligations are satisfied and measured in an amount that reflects the consideration the Company expects to be entitled to in exchange for performing the services. The timing of the Company's revenue recognition may differ from the timing of payment by customers. A receivable is recorded to Premiums and accounts receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, deferred revenue is recorded to Accounts payable and other liabilities when payment is received before the performance obligations are satisfied. Other revenue includes primarily sublease income.
v3.24.3
INVESTMENTS
9 Months Ended
Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
INVESTMENTS INVESTMENTS
Net investment income was attributable to the following:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Fixed maturity securities$22,996 $15,987 $54,414 $46,219 
Cash equivalents25,986 24,874 84,659 69,691 
Other (1)
1,555 1,682 4,783 4,605 
Investment income50,537 42,543 143,856 120,515 
Investment expense
(211)(175)(547)(607)
Total
$50,326 $42,368 $143,309 $119,908 
(1) Represents the net interest earned on funds withheld.


As of September 30, 2024 and December 31, 2023, the Company recorded accrued investment income of $20.7 million and $6.6 million, respectively.
The following tables provide summaries of the Company's investments by major security type as of September 30, 2024 and December 31, 2023:
September 30, 2024
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair Value
U.S. treasury and agency securities
$1,891,092 $24,133 $(974)$1,914,251 
Corporate notes
481,698 3,019 (157)484,560 
Certificates of deposit
38,865 — — 38,865 
Total
$2,411,655 $27,152 $(1,131)$2,437,676 

December 31, 2023
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair Value
U.S. treasury and agency securities
$802,288 $1,689 $(1,062)$802,915 
Corporate notes
234,908 854 (198)235,564 
Certificates of deposit
16,663 — — 16,663 
Total
$1,053,859 $2,543 $(1,260)$1,055,142 

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position, by the length of time in which the securities have continuously been in that position, as of September 30, 2024 and December 31, 2023:
September 30, 2024
Less than 12 Months12 Months or Longer
(in thousands, except no. of securities)Number of SecuritiesFair ValueGross
Unrealized Losses
Number of SecuritiesFair ValueGross
Unrealized Losses
U.S. treasury and agency securities90 $455,067 $(910)$47,680 $(63)
Corporate notes75 99,362 (154)3,270 (4)
Total165 $554,429 $(1,064)$7 $50,950 $(67)

December 31, 2023
Less than 12 Months12 Months or Longer
(in thousands, except no. of securities)Number of SecuritiesFair ValueGross
Unrealized Losses
Number of SecuritiesFair ValueGross
Unrealized Losses
U.S. treasury and agency securities69 $480,312 $(995)$24,551 $(67)
Corporate notes64 79,024 (166)19 5,545 (32)
Total133 $559,336 $(1,161)23 $30,096 $(99)
The Company monitors available-for-sale debt securities for credit losses and recognizes an allowance for credit losses when factors indicate a decline in the fair value of a security is credit-related. Certain investments may experience a decline in fair value due to changes in market interest rates, changes in general economic conditions, or a deterioration in the credit worthiness of a security's issuer. For securities in an unrealized loss position that the Company does not intend to sell, the Company has assessed the gross unrealized losses during the period and determined an allowance for credit losses is not necessary because the declines in fair value are believed to be due to market fluctuations and not due to credit-related events.

The amortized cost and fair value of the Company's fixed maturity securities as of September 30, 2024 and December 31, 2023 by contractual maturity are shown below. Actual maturities of these securities could differ from their contractual maturities because issuers may have the right to call or prepay obligations, with or without penalties.

September 30, 2024December 31, 2023
(in thousands)
Amortized Cost
Fair Value
Amortized CostFair Value
Due in one year or less$502,534 $503,784 $690,694 $689,833 
Due after one year through five years1,909,121 1,933,892 363,165 365,309 
Total
$2,411,655 $2,437,676 $1,053,859 $1,055,142 
v3.24.3
FAIR VALUE MEASUREMENTS
9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Fair value represents the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The Company's financial assets and liabilities measured at fair value on a recurring basis are categorized into a three-level fair value hierarchy based on the priority of the inputs used in the fair value valuation technique.

The levels of the fair value hierarchy are as follows:

Level 1: Inputs utilize quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Inputs utilize quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations in which all significant inputs are observable in active markets.
Level 3: Inputs utilized are unobservable but significant to the fair value measurement for the asset or liability. The unobservable inputs are used to measure fair value to the extent relevant observable inputs are not available. The unobservable inputs typically reflect management’s own estimates about the assumptions a market participant would use in pricing the asset or liability.

The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis:

September 30, 2024
(in thousands)
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents
$95,844$$$95,844
Investments
U.S. treasury and agency securities
$— $1,914,251 $— $1,914,251 
Corporate notes
— 484,560 — 484,560 
Certificates of deposit
— 38,865 — 38,865 
Restricted investments
U.S. treasury securities
— 4,285 — 4,285 
Total$95,844 $2,441,961 $ $2,537,805 
December 31, 2023
(in thousands)
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents$434,330 $— $— $434,330 
Investments
U.S. treasury and agency securities
$— $802,915 $— $802,915 
Corporate notes
— 235,564 — 235,564 
Certificates of deposit
— 16,663 — 16,663 
Restricted investments
   U.S. treasury securities— 5,736 — 5,736 
Certificates of deposit$— $2,478 $— $2,478 
Total$434,330 $1,063,356 $ $1,497,686 
v3.24.3
RESTRICTED CASH AND RESTRICTED DEPOSITS
9 Months Ended
Sep. 30, 2024
Cash and Cash Equivalents [Abstract]  
RESTRICTED CASH AND RESTRICTED DEPOSITS RESTRICTED CASH AND RESTRICTED DEPOSITS
The Company maintains cash, cash equivalents and investments on deposit for its property leases or pledged to various state agencies in connection with its insurance licensure. The restricted cash and cash equivalents and restricted investments presented below are included in Restricted deposits in the accompanying Condensed Consolidated Balance Sheets.

(in thousands)September 30, 2024December 31, 2023
Restricted cash and cash equivalents$25,784 $21,656 
Restricted investments4,285 8,214 
Restricted deposits$30,069 $29,870 
v3.24.3
BENEFITS PAYABLE
9 Months Ended
Sep. 30, 2024
Insurance [Abstract]  
BENEFITS PAYABLE BENEFITS PAYABLE
Reserves for medical claims expenses are estimated using actuarial assumptions and recorded as Benefits payable liabilities on the Condensed Consolidated Balance Sheets. The assumptions for the estimates and for establishing the resulting liability are reviewed and any adjustments to reserves are reflected in the Condensed Consolidated Statements of Operations in the period in which the estimates are updated.

The following table provides a rollforward of the Company’s beginning and ending benefits payable and claims adjustment expenses ("CAE") payable balances for the nine months ended September 30, 2024 and 2023:

As of September 30, 2024
As of September 30, 2023
(in thousands)Benefits PayableUnallocated Claims
Adjustment Expense
TotalBenefits PayableUnallocated Claims
Adjustment Expense
Total
Benefits payable, beginning of the period$965,986 $13,192 $979,178 $937,727 $12,712 $950,439 
Less: Reinsurance recoverable57,111 — 57,111 277,944 — 277,944 
Benefits payable, beginning of the period, net$908,875 $13,192 $922,067 $659,783 $12,712 $672,495 
Claims incurred and CAE
Current year$5,388,787 $82,642 $5,471,429 $3,418,106 $68,814 $3,486,920 
Prior years(121,312)— (121,312)18,679 — 18,679 
Total claims incurred and CAE, net$5,267,475 $82,642 $5,350,117 $3,436,785 $68,814 $3,505,599 
Claims paid and CAE
Current year$4,345,363 $68,013 $4,413,376 $2,737,037 $59,454 $2,796,491 
Prior years533,393 9,061 542,454 522,678 9,664 532,342 
Total claims and CAE paid, net$4,878,756 $77,074 $4,955,830 $3,259,715 $69,118 $3,328,833 
Benefits and CAE payable, end of period, net$1,297,594 $18,760 $1,316,354 $836,853 $12,408 $849,261 
Add: Reinsurance recoverable59,132 — 59,132 73,596 — 73,596 
Benefits and CAE payable, end of period$1,356,726 $18,760 $1,375,486 $910,449 $12,408 $922,857 

Amounts incurred related to prior periods vary from previously estimated liabilities as more claim information becomes available and claims are ultimately settled. The favorable development recognized in the nine months ended September 30, 2024 resulted primarily from lower than expected paid claims.
v3.24.3
DEBT
9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
DEBT DEBT
Convertible Senior Notes

As previously disclosed in Note 15 - Long-Term Debt, in our Annual Report on Form 10-K for the year ended December 31, 2023, in February 2022, the Company issued $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC and Tenere Capital LLC. The 2031 Notes are the Company's senior, unsecured obligations which bear interest at a rate of 7.25% per annum, payable in cash, semi-annually in arrears on June 30 and December 31 of each year, commencing on June 30, 2022. The 2031 Notes will mature on December 31, 2031, subject to earlier repurchase, redemption, or conversion.

The 2031 Notes are convertible into the Company's Class A common stock at an initial conversion rate of 120.1721 per $1,000 principal amount (equivalent to an initial conversion price of approximately $8.32 per share of Class A common stock), subject to customary adjustments upon the occurrence of certain events. During the quarterly period ended September 30, 2024, a conditional conversion feature of the 2031 Notes was satisfied when the last reported sales price per share of the Company’s common stock was greater than 130% of the conversion price of $8.32 per share for each of at least twenty (20) trading days during the period of thirty (30) consecutive trading days ending on, and including, the last trading day of the quarter. As a result, the 2031 Notes are convertible during the fourth quarter of 2024 at the option of the holder. As of the date of this Quarterly Report on Form 10-Q, the 2031 Notes have not been converted. Upon conversion, the 2031 Notes will be settled, at the Company's election, in shares of Class A common stock, cash, or a combination of cash and shares of Class A common stock, subject to certain exceptions.

As of September 30, 2024, the net carrying amount of the 2031 Notes was $299.4 million, with unamortized debt discount and issuance costs of $5.6 million. The estimated fair value of the 2031 Notes as of September 30, 2024 was $807.0 million. The Company classified the fair value of the 2031 Notes as a level 3 measurement due to the lack of observable market data over fair value inputs such as stock price volatility over the term of the 2031 Notes and the Company's cost of debt.

The following table presents the interest expense indicating an effective interest rate of 7.61% over the term of the 2031 Notes:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Coupon interest expense$5,344 $5,528 $16,400 $16,584 
Amortization of debt discount and issuance costs194 195 583 584 
Total interest expense$5,538 $5,723 $16,983 $17,168 

Revolving Credit Facility

As previously disclosed in Note 15 - Long-Term Debt, in our Annual Report on Form 10-K for the year ended December 31, 2023, on December 28, 2023, the Company entered into a third amendment to its senior secured credit agreement (the “Third Amendment”), with certain lenders (the “Lenders”) and Wells Fargo Bank, National Association, as administrative agent, which amended the senior secured credit agreement, dated as of February 21, 2021 (as amended by the Third Amendment, the “Amended Credit Agreement”). The Amended Credit Agreement provides for a revolving loan credit facility (the “Revolving Credit Facility”) in the aggregate principal amount of $115.0 million. The Revolving Credit Facility is guaranteed by Oscar Management Corporation, each wholly owned subsidiary of the Company, and all of the Company's future direct and indirect subsidiaries (in each case subject to certain permitted exceptions, including exceptions for certain guarantees (i) that would require material governmental consents or (ii) in respect of joint ventures). The Revolving Credit Facility is secured by substantially all of the Company’s and the guarantors’ assets (subject to certain exceptions). Proceeds are to be used solely for general corporate purposes of the Company.
The Company is permitted to increase commitments under the Revolving Credit Facility by an aggregate amount not to exceed $50.0 million, subject to certain conditions.

The Revolving Credit Facility is available until December 2025, provided the Company is in compliance with all covenants, including financial covenants to maintain minimum thresholds related to direct policy premiums, consolidated Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”), and liquidity, and a maximum medical loss ratio.

As of September 30, 2024, there were no outstanding borrowings under the Revolving Credit Facility.
v3.24.3
EARNINGS (LOSS) PER SHARE
9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
EARNINGS (LOSS) PER SHARE EARNINGS (LOSS) PER SHARE
Basic earnings per share is computed by dividing net income (loss) for the period by the weighted-average shares of common stock outstanding during the period. In periods when the Company is in a net loss position, potentially dilutive securities are excluded from the computation of diluted earnings per share because their inclusion would have an anti-dilutive effect. Thus, basic earnings per share is the same as diluted earnings per share.

During periods of net income, diluted earnings per share is calculated by adjusting net income for any interest charges and changes in the fair value of the bifurcated conversion option applicable to the convertible senior notes. This adjusted net income is then divided by the sum of the basic weighted-average shares of common stock and any dilutive potential common stock outstanding during the period, using the treasury stock method. Potential common stock includes the effect of outstanding dilutive stock options, restricted stock units, performance-based restricted stock units, as well as shares the Company could be obligated to issue from its convertible senior notes, as described in Note 7 - Debt, using the if-converted method. The calculation for basic and diluted earnings per share is as follows:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2024202320242023
Numerator:
Net income (loss) attributable to Oscar Health, Inc.$(54,596)$(65,398)$178,979 $(120,698)
Effect of convertible senior notes— — 17,459 — 
Net income (loss) available to Oscar Health, Inc.
common shareholders
$(54,596)$(65,398)$196,438 $(120,698)
Denominator:
Weighted average shares of common stock outstanding243,106223,099237,759219,827
Common stock equivalents27,048
Effect of convertible senior notes 36,652
Weighted average shares of common stock outstanding
and potential dilutive common shares outstanding
243,106 223,099 301,459 219,827 
Net Earnings (Loss) per Share
Basic
$(0.22)$(0.29)$0.75 $(0.55)
Diluted
$(0.22)$(0.29)$0.65 $(0.55)
The following potential common shares were excluded from the computation of diluted net income (loss) per share attributable to Oscar Health, Inc. because including them would have had an anti-dilutive effect:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Stock options to purchase common stock
18,698 27,016 1,291 27,016 
Restricted stock units
16,040 25,206 369 25,206 
Performance-based restricted stock units7,453 9,350 — 9,350 
Shares underlying convertible notes (Note 7)36,653 36,652 — 36,652 
Total
78,844 98,224 1,660 98,224 
v3.24.3
REINSURANCE
9 Months Ended
Sep. 30, 2024
Insurance [Abstract]  
REINSURANCE REINSURANCE
The Company participates in quota share reinsurance to limit risk and capital requirements and XOL reinsurance to mitigate the exposure of high cost or catastrophic member risk. The quota share reinsurance arrangements are with more than one counterparty with multiple state-level treaties. The XOL reinsurance arrangements are with a private counterparty and federal and state-run programs. A summary of the Company's reinsurance agreements and related accounting treatment is included in Note 4 - Reinsurance, in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The Company also operates under an assumed reinsurance contract, under which the Company shares proportionally in all premiums and claims underwritten for the Cigna+Oscar Small Group offering.

Reinsurance Contracts Accounted for under Deposit Accounting

As of September 30, 2024 and December 31, 2023, a deposit liability balance of $13.2 million and $7.0 million, respectively, was recorded for the Company's quota share arrangements accounted for under deposit accounting and represents fees due to the reinsurer, which are recognized within Selling, general, and administrative expenses on the Consolidated Statements of Operations.

For the three and nine months ended September 30, 2024, the Company ceded 51% and 53% of its premium under reinsurance contracts accounted for under deposit accounting. For the three and nine months ended September 30, 2023, the Company ceded 45% and 46%, respectively, of its premium under reinsurance contracts accounted for under deposit accounting.

Reinsurance Contracts Accounted for under Reinsurance Accounting

Reinsurance accounting applies to quota share reinsurance contracts that are in runoff as well as the XOL treaties. Under reinsurance accounting, the Company records premium paid to the reinsurer as a reduction to premium revenue with a corresponding reinsurance payable. In the case of federal and state-run reinsurance programs, no reinsurance premiums are paid. Expected reimbursement from the reinsurer for claims incurred are recorded as a reduction to claims incurred with a corresponding reinsurance recoverable asset. The tables below present information for the Company's reinsurance arrangements accounted for under reinsurance accounting. Please see Note 2 - Revenue Recognition for total reinsurance premiums ceded and reinsurance premiums assumed, which are included as components of total Premium revenue in the Condensed Consolidated Statements of Operations.

The following table reconciles total Medical expenses to the amount presented in the Condensed Consolidated Statements of Operations:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Direct claims incurred
$1,986,189 $1,116,679 $5,189,901 $3,301,424 
Ceded reinsurance claims
(41,171)(15,266)(90,823)(33,833)
Assumed reinsurance claims
58,961 61,781 168,397 169,194 
Medical expenses
$2,003,979 $1,163,194 $5,267,475 $3,436,785 
The Company records Selling, general and administrative ("SG&A") expenses net of reinsurance ceding commissions and assumed SG&A expenses. The following table reconciles total Selling, general and administrative expenses to the amount presented in the Condensed Consolidated Statements of Operations:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Selling, general and administrative expenses, gross
$459,522 $325,820 $1,289,362 $1,060,636 
Reinsurance ceding commissions
855 30 383 976 
Selling, general and administrative expenses
$460,377 $325,850 $1,289,745 $1,061,612 

The composition of the Reinsurance recoverable balance on the Condensed Consolidated Balance Sheets is as follows:

(in thousands)September 30, 2024December 31, 2023
Reinsurance premium and claim recoverables$272,478 $224,837 
Reinsurance ceding commissions6,915 7,054 
Experience refunds on reinsurance agreements(6,076)9,303 
Reinsurance recoverable$273,317 $241,194 

Credit Ratings

The financial condition of the Company's reinsurers is regularly evaluated to minimize exposure to significant losses. A key credit quality indicator for reinsurance is the financial strength ratings issued by the credit rating agencies, which provide an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. The Company’s reinsurers have most recently been issued financial strength ratings of A+ or higher.

The creditworthiness of each reinsurer is evaluated in order to assess counterparty credit risk and estimate an allowance for expected credit losses on the Company's reinsurance recoverable balances.
v3.24.3
BUSINESS ARRANGEMENTS
9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BUSINESS ARRANGEMENTS BUSINESS ARRANGEMENTS
Variable Interest Entities

In the normal course of business, the Company entered into business arrangements with integrated health systems, as well as medical professional corporations that employ health care providers to deliver telemedical healthcare services to its covered member population in various states. The financial results of these entities are consolidated into the Company's financial statements.

The following table presents the collective assets and liabilities of the Company's variable interest entities:

(in thousands)September 30, 2024December 31, 2023
Assets$135,610 $125,709 
Liabilities$77,320 $74,568 
v3.24.3
RELATED PARTY TRANSACTIONS
9 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
In February 2022, the Company issued the 2031 Notes to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital Management, LLC, LionTree Investment Management, LLC and Tenere Capital LLC (collectively, the “Purchasers”). See Note 7 - Debt for additional information.
v3.24.3
COMMITMENTS AND CONTINGENCIES
9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
The Company’s current and past business practices are subject to review or other investigations by various state insurance and healthcare regulatory authorities and other state and federal regulatory authorities. These reviews focus on numerous facets of the Company’s business, including claims payment practices, statutory capital requirements, provider contracting, risk adjustment, competitive practices, commission payments, privacy issues, network adequacy, utilization management practices, pharmacy benefits, access to care, and sales practices, among others. Some of these reviews have historically resulted in fines imposed on the Company and some have required changes to certain of the Company’s practices. The Company continues to be subject to these reviews, which could result in additional fines or other sanctions being imposed on the Company or additional changes to certain of its practices.

The Company is also currently involved in, and may in the future from time to time become involved in, legal proceedings and other claims in the ordinary course of its business, including class actions and suits brought by the Company’s members, providers, commercial counterparties, employees, and other parties relating to the Company’s business, including management and administration of health benefit plans and other services. Such matters can include various employment claims, disputes regarding reinsurance arrangements, disputes relating to intellectual property and the Telephone Consumer Protection Act and class action lawsuits, or other claims relating to the performance of contractual and non-contractual obligations to providers, members, employer groups, and others, including, but not limited to, the alleged failure to properly pay in-network and out-of-network claims and challenges to the manner in which the Company processes claims, and claims alleging that the Company has engaged in unfair business practices.

In addition, on May 12, 2022, a securities class action lawsuit against the Company, certain of its directors and officers, and the underwriters that participated in the Company’s initial public offering ("IPO") was commenced in the United States District Court for the Southern District of New York, captioned Carpenter v. Oscar Health, Inc., et al., Case No. 1:22-CV-03885 (S.D.N.Y.) (the “Securities Action”). The initial complaint in the Securities Action asserted violations of Sections 11 and 15 of the Securities Act based on the Company’s purported failure to disclose in its IPO registration statement growing COVID-19 testing and treatment costs, the impact of significant Special Enrollment Period membership, and risk adjustment data validation results for 2019 and 2020. By Court orders dated September 27, 2022 and December 13, 2022, the Court appointed a lead plaintiff and lead counsel on behalf of the putative class. An amended complaint filed on December 6, 2022 asserts the same violations of Sections 11 and 15 of the Securities Act, but this time based on the Company’s alleged failure to disclose in its IPO registration statement purportedly inadequate controls and systems in connection with the risk adjustment data validation audit for 2019, alleging that this purported omission caused losses and damages for members of the putative class. The amended complaint seeks unspecified compensatory damages as well as interest, fees, and costs. On April 4, 2023, the Company moved to dismiss the amended complaint. Briefing on the motion was completed on July 7, 2023. The Company believes it has meritorious defenses to these claims. At this time, the Company cannot predict the outcome, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

The Company records liabilities for its reasonable estimates of probable losses resulting from these matters where appropriate. Estimates of losses resulting from legal and regulatory matters involving the Company are inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; or could result in a change in business practices. Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable that a loss may be incurred, the ultimate settlement of which could be material.

Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on Oscar's business, results of operations, financial condition or cash flows.
v3.24.3
CANCELLATION OF FOUNDERS AWARDS
9 Months Ended
Sep. 30, 2024
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Forfeitures and Expirations [Abstract]  
CANCELLATION OF FOUNDERS AWARDS CANCELLATION OF FOUNDERS AWARDS
On March 28, 2023, the Company’s Co-Founders, Mario Schlosser (the Company’s President of Technology and Chief Technology Officer and former Chief Executive Officer) and Joshua Kushner (the Company’s Vice Chairman), recommended to the Company’s Board of Directors that they should cancel and terminate the applicable awards that were granted to them in connection with the Company’s Initial Public Offering (the “Founders Awards”). This recommendation was made in support of reducing the dilutive effects of equity awards granted on April 3, 2023, to Mark T. Bertolini in connection with his appointment as the Company’s Chief Executive Officer, effective April 3, 2023, and the Company’s annual employee equity awards granted in 2023. On March 28, 2023, Mr. Schlosser and Mr. Kushner each entered into an agreement to cancel and terminate his Founders Award, which consisted of performance-based restricted stock units covering 4,229,853 shares (for Mr. Schlosser) and 2,114,926 shares (for Mr. Kushner) of the Company’s Class A common stock. As a result of this cancellation, in March 2023 the Company recognized approximately $46.3 million of accelerated stock-based compensation expense that would have otherwise been recognized over the remaining vesting period of the awards. Stock-based compensation expense is included in the Selling, general and administrative line item on the Condensed Consolidated Statements of Operations.
v3.24.3
Pay vs Performance Disclosure - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Pay vs Performance Disclosure        
Net Income (Loss) $ (54,596) $ (65,398) $ 178,979 $ (120,698)
v3.24.3
Insider Trading Arrangements
3 Months Ended 9 Months Ended
Sep. 30, 2024
shares
Sep. 30, 2024
shares
Trading Arrangements, by Individual    
Non-Rule 10b5-1 Arrangement Adopted false  
Rule 10b5-1 Arrangement Terminated false  
Non-Rule 10b5-1 Arrangement Terminated false  
Alessandrea Quane [Member]    
Trading Arrangements, by Individual    
Material Terms of Trading Arrangement   On September 27, 2024, Alessandrea Quane, the Company’s Chief Insurance Officer, entered into a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 211,774 shares of the Company’s Class A common stock by August 29, 2025.
Name Alessandrea Quane  
Title Company’s Chief Insurance Officer  
Rule 10b5-1 Arrangement Adopted true  
Adoption Date September 27, 2024  
Expiration Date August 29, 2025  
Arrangement Duration 336 days  
Aggregate Available 211,774 211,774
v3.24.3
ORGANIZATION (Policies)
9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation

The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), and the applicable rules and regulations of the Securities and Exchange Commission for interim financial information. As such, these financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statements.

These Condensed Consolidated Financial Statements are unaudited; however, in the opinion of management, they reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the information presented in conformity with U.S. GAAP applicable for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of results for the full year or future periods. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2023.

Certain monetary amounts, percentages, and other figures included in this Quarterly Report on Form 10-Q have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report on Form 10-Q have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report on Form 10-Q may vary from those obtained by performing the same calculations using the figures in the Company's Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. Certain other amounts that appear in this Quarterly Report on Form 10-Q may not sum due to rounding.
Use of Estimates
Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates inherent in the preparation of the accompanying interim Condensed Consolidated Financial Statements include healthcare costs incurred but not yet reported (“IBNR”) and risk adjustment transfers. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ materially from these estimates.
Accounting Pronouncements - Not Yet Adopted
Accounting Pronouncements - Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07 ("ASU 2023-07"), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires, for each reportable segment, disclosure of significant segment expenses categories, other segment items, enhanced interim disclosures of certain segment-related disclosures that previously were only required annually, and other disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has evaluated the impact of the adoption of this guidance on the Consolidated Financial Statements and related disclosures. The Company believes the adoption of ASU 2023-07 will not have a material impact on the Company’s financial position but will result in additional segment footnote disclosures in the Company’s annual consolidated financial statements for the year ending December 31, 2024, as well as interim periods thereafter. More specifically, the Company will provide enhanced disclosures regarding the measure of profit or loss reviewed by the Chief Operating Decision Maker as well as enhanced expense disclosures.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and other amendments to improve the effectiveness of income tax disclosures. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements and related disclosures.
v3.24.3
REVENUE RECOGNITION (Tables)
9 Months Ended
Sep. 30, 2024
Insurance [Abstract]  
Effects of Reinsurance
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Direct policy premiums$2,687,883 $1,548,571 $7,542,098 $4,796,819 
Assumed premiums55,062 57,836 173,134 174,166 
Risk adjustment transfers(374,828)(211,422)(1,077,121)(665,200)
Reinsurance premiums ceded140 (2,903)(12,056)(10,111)
Premium$2,368,257 $1,392,082 $6,626,055 $4,295,674 
The following table reconciles total Medical expenses to the amount presented in the Condensed Consolidated Statements of Operations:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Direct claims incurred
$1,986,189 $1,116,679 $5,189,901 $3,301,424 
Ceded reinsurance claims
(41,171)(15,266)(90,823)(33,833)
Assumed reinsurance claims
58,961 61,781 168,397 169,194 
Medical expenses
$2,003,979 $1,163,194 $5,267,475 $3,436,785 
The Company records Selling, general and administrative ("SG&A") expenses net of reinsurance ceding commissions and assumed SG&A expenses. The following table reconciles total Selling, general and administrative expenses to the amount presented in the Condensed Consolidated Statements of Operations:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Selling, general and administrative expenses, gross
$459,522 $325,820 $1,289,362 $1,060,636 
Reinsurance ceding commissions
855 30 383 976 
Selling, general and administrative expenses
$460,377 $325,850 $1,289,745 $1,061,612 

The composition of the Reinsurance recoverable balance on the Condensed Consolidated Balance Sheets is as follows:

(in thousands)September 30, 2024December 31, 2023
Reinsurance premium and claim recoverables$272,478 $224,837 
Reinsurance ceding commissions6,915 7,054 
Experience refunds on reinsurance agreements(6,076)9,303 
Reinsurance recoverable$273,317 $241,194 
v3.24.3
INVESTMENTS (Tables)
9 Months Ended
Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Summary of investment income
Net investment income was attributable to the following:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Fixed maturity securities$22,996 $15,987 $54,414 $46,219 
Cash equivalents25,986 24,874 84,659 69,691 
Other (1)
1,555 1,682 4,783 4,605 
Investment income50,537 42,543 143,856 120,515 
Investment expense
(211)(175)(547)(607)
Total
$50,326 $42,368 $143,309 $119,908 
(1) Represents the net interest earned on funds withheld.
Summary of investments
The following tables provide summaries of the Company's investments by major security type as of September 30, 2024 and December 31, 2023:
September 30, 2024
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair Value
U.S. treasury and agency securities
$1,891,092 $24,133 $(974)$1,914,251 
Corporate notes
481,698 3,019 (157)484,560 
Certificates of deposit
38,865 — — 38,865 
Total
$2,411,655 $27,152 $(1,131)$2,437,676 

December 31, 2023
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair Value
U.S. treasury and agency securities
$802,288 $1,689 $(1,062)$802,915 
Corporate notes
234,908 854 (198)235,564 
Certificates of deposit
16,663 — — 16,663 
Total
$1,053,859 $2,543 $(1,260)$1,055,142 
Summary of investments in a gross unrealized loss position
The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position, by the length of time in which the securities have continuously been in that position, as of September 30, 2024 and December 31, 2023:
September 30, 2024
Less than 12 Months12 Months or Longer
(in thousands, except no. of securities)Number of SecuritiesFair ValueGross
Unrealized Losses
Number of SecuritiesFair ValueGross
Unrealized Losses
U.S. treasury and agency securities90 $455,067 $(910)$47,680 $(63)
Corporate notes75 99,362 (154)3,270 (4)
Total165 $554,429 $(1,064)$7 $50,950 $(67)

December 31, 2023
Less than 12 Months12 Months or Longer
(in thousands, except no. of securities)Number of SecuritiesFair ValueGross
Unrealized Losses
Number of SecuritiesFair ValueGross
Unrealized Losses
U.S. treasury and agency securities69 $480,312 $(995)$24,551 $(67)
Corporate notes64 79,024 (166)19 5,545 (32)
Total133 $559,336 $(1,161)23 $30,096 $(99)
Summary of contractual maturities of available-for-sale securities
The amortized cost and fair value of the Company's fixed maturity securities as of September 30, 2024 and December 31, 2023 by contractual maturity are shown below. Actual maturities of these securities could differ from their contractual maturities because issuers may have the right to call or prepay obligations, with or without penalties.

September 30, 2024December 31, 2023
(in thousands)
Amortized Cost
Fair Value
Amortized CostFair Value
Due in one year or less$502,534 $503,784 $690,694 $689,833 
Due after one year through five years1,909,121 1,933,892 363,165 365,309 
Total
$2,411,655 $2,437,676 $1,053,859 $1,055,142 
v3.24.3
FAIR VALUE MEASUREMENTS (Tables)
9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of assets and liabilities measured on recurring basis
The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis:

September 30, 2024
(in thousands)
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents
$95,844$$$95,844
Investments
U.S. treasury and agency securities
$— $1,914,251 $— $1,914,251 
Corporate notes
— 484,560 — 484,560 
Certificates of deposit
— 38,865 — 38,865 
Restricted investments
U.S. treasury securities
— 4,285 — 4,285 
Total$95,844 $2,441,961 $ $2,537,805 
December 31, 2023
(in thousands)
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents$434,330 $— $— $434,330 
Investments
U.S. treasury and agency securities
$— $802,915 $— $802,915 
Corporate notes
— 235,564 — 235,564 
Certificates of deposit
— 16,663 — 16,663 
Restricted investments
   U.S. treasury securities— 5,736 — 5,736 
Certificates of deposit$— $2,478 $— $2,478 
Total$434,330 $1,063,356 $ $1,497,686 
v3.24.3
RESTRICTED CASH AND RESTRICTED DEPOSITS (Tables)
9 Months Ended
Sep. 30, 2024
Cash and Cash Equivalents [Abstract]  
Schedule of restricted deposits The restricted cash and cash equivalents and restricted investments presented below are included in Restricted deposits in the accompanying Condensed Consolidated Balance Sheets.
(in thousands)September 30, 2024December 31, 2023
Restricted cash and cash equivalents$25,784 $21,656 
Restricted investments4,285 8,214 
Restricted deposits$30,069 $29,870 
v3.24.3
BENEFITS PAYABLE (Tables)
9 Months Ended
Sep. 30, 2024
Insurance [Abstract]  
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense
The following table provides a rollforward of the Company’s beginning and ending benefits payable and claims adjustment expenses ("CAE") payable balances for the nine months ended September 30, 2024 and 2023:

As of September 30, 2024
As of September 30, 2023
(in thousands)Benefits PayableUnallocated Claims
Adjustment Expense
TotalBenefits PayableUnallocated Claims
Adjustment Expense
Total
Benefits payable, beginning of the period$965,986 $13,192 $979,178 $937,727 $12,712 $950,439 
Less: Reinsurance recoverable57,111 — 57,111 277,944 — 277,944 
Benefits payable, beginning of the period, net$908,875 $13,192 $922,067 $659,783 $12,712 $672,495 
Claims incurred and CAE
Current year$5,388,787 $82,642 $5,471,429 $3,418,106 $68,814 $3,486,920 
Prior years(121,312)— (121,312)18,679 — 18,679 
Total claims incurred and CAE, net$5,267,475 $82,642 $5,350,117 $3,436,785 $68,814 $3,505,599 
Claims paid and CAE
Current year$4,345,363 $68,013 $4,413,376 $2,737,037 $59,454 $2,796,491 
Prior years533,393 9,061 542,454 522,678 9,664 532,342 
Total claims and CAE paid, net$4,878,756 $77,074 $4,955,830 $3,259,715 $69,118 $3,328,833 
Benefits and CAE payable, end of period, net$1,297,594 $18,760 $1,316,354 $836,853 $12,408 $849,261 
Add: Reinsurance recoverable59,132 — 59,132 73,596 — 73,596 
Benefits and CAE payable, end of period$1,356,726 $18,760 $1,375,486 $910,449 $12,408 $922,857 
v3.24.3
DEBT (Tables)
9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Schedule of debt interest expense
The following table presents the interest expense indicating an effective interest rate of 7.61% over the term of the 2031 Notes:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Coupon interest expense$5,344 $5,528 $16,400 $16,584 
Amortization of debt discount and issuance costs194 195 583 584 
Total interest expense$5,538 $5,723 $16,983 $17,168 
v3.24.3
EARNINGS (LOSS) PER SHARE (Tables)
9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Schedule of basic and diluted earnings per share The calculation for basic and diluted earnings per share is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2024202320242023
Numerator:
Net income (loss) attributable to Oscar Health, Inc.$(54,596)$(65,398)$178,979 $(120,698)
Effect of convertible senior notes— — 17,459 — 
Net income (loss) available to Oscar Health, Inc.
common shareholders
$(54,596)$(65,398)$196,438 $(120,698)
Denominator:
Weighted average shares of common stock outstanding243,106223,099237,759219,827
Common stock equivalents27,048
Effect of convertible senior notes 36,652
Weighted average shares of common stock outstanding
and potential dilutive common shares outstanding
243,106 223,099 301,459 219,827 
Net Earnings (Loss) per Share
Basic
$(0.22)$(0.29)$0.75 $(0.55)
Diluted
$(0.22)$(0.29)$0.65 $(0.55)
Schedule of antidilutive securities excluded from computation
The following potential common shares were excluded from the computation of diluted net income (loss) per share attributable to Oscar Health, Inc. because including them would have had an anti-dilutive effect:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Stock options to purchase common stock
18,698 27,016 1,291 27,016 
Restricted stock units
16,040 25,206 369 25,206 
Performance-based restricted stock units7,453 9,350 — 9,350 
Shares underlying convertible notes (Note 7)36,653 36,652 — 36,652 
Total
78,844 98,224 1,660 98,224 
v3.24.3
REINSURANCE (Tables)
9 Months Ended
Sep. 30, 2024
Insurance [Abstract]  
Effects of Reinsurance
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Direct policy premiums$2,687,883 $1,548,571 $7,542,098 $4,796,819 
Assumed premiums55,062 57,836 173,134 174,166 
Risk adjustment transfers(374,828)(211,422)(1,077,121)(665,200)
Reinsurance premiums ceded140 (2,903)(12,056)(10,111)
Premium$2,368,257 $1,392,082 $6,626,055 $4,295,674 
The following table reconciles total Medical expenses to the amount presented in the Condensed Consolidated Statements of Operations:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Direct claims incurred
$1,986,189 $1,116,679 $5,189,901 $3,301,424 
Ceded reinsurance claims
(41,171)(15,266)(90,823)(33,833)
Assumed reinsurance claims
58,961 61,781 168,397 169,194 
Medical expenses
$2,003,979 $1,163,194 $5,267,475 $3,436,785 
The Company records Selling, general and administrative ("SG&A") expenses net of reinsurance ceding commissions and assumed SG&A expenses. The following table reconciles total Selling, general and administrative expenses to the amount presented in the Condensed Consolidated Statements of Operations:

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Selling, general and administrative expenses, gross
$459,522 $325,820 $1,289,362 $1,060,636 
Reinsurance ceding commissions
855 30 383 976 
Selling, general and administrative expenses
$460,377 $325,850 $1,289,745 $1,061,612 

The composition of the Reinsurance recoverable balance on the Condensed Consolidated Balance Sheets is as follows:

(in thousands)September 30, 2024December 31, 2023
Reinsurance premium and claim recoverables$272,478 $224,837 
Reinsurance ceding commissions6,915 7,054 
Experience refunds on reinsurance agreements(6,076)9,303 
Reinsurance recoverable$273,317 $241,194 
v3.24.3
BUSINESS ARRANGEMENTS (Tables)
9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of variable interest entities
The following table presents the collective assets and liabilities of the Company's variable interest entities:

(in thousands)September 30, 2024December 31, 2023
Assets$135,610 $125,709 
Liabilities$77,320 $74,568 
v3.24.3
ORGANIZATION (Details)
member in Thousands
9 Months Ended
Sep. 30, 2024
member
segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of operating segments | segment 1
Number of members | member 1,650
v3.24.3
REVENUE RECOGNITION (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Insurance [Abstract]        
Direct policy premiums $ 2,687,883 $ 1,548,571 $ 7,542,098 $ 4,796,819
Assumed premiums 55,062 57,836 173,134 174,166
Risk adjustment transfers (374,828) (211,422) (1,077,121) (665,200)
Reinsurance premiums ceded 140 (2,903) (12,056) (10,111)
Premium $ 2,368,257 $ 1,392,082 $ 6,626,055 $ 4,295,674
v3.24.3
REVENUE RECOGNITION - Narrative (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Effects of Reinsurance [Line Items]        
Direct policy premiums $ 2,687,883 $ 1,548,571 $ 7,542,098 $ 4,796,819
CMS        
Effects of Reinsurance [Line Items]        
Direct policy premiums $ 2,488,400 $ 1,328,200 $ 6,952,300 $ 4,113,000
v3.24.3
INVESTMENTS - Summary of investment income (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Debt Securities, Available-for-sale [Line Items]        
Investment income $ 50,537 $ 42,543 $ 143,856 $ 120,515
Investment expense (211) (175) (547) (607)
Total 50,326 42,368 143,309 119,908
Fixed maturity securities        
Debt Securities, Available-for-sale [Line Items]        
Investment income 22,996 15,987 54,414 46,219
Cash equivalents        
Debt Securities, Available-for-sale [Line Items]        
Investment income 25,986 24,874 84,659 69,691
Other        
Debt Securities, Available-for-sale [Line Items]        
Investment income $ 1,555 $ 1,682 $ 4,783 $ 4,605
v3.24.3
INVESTMENTS - Narrative (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]    
Accrued investment income $ 20.7 $ 6.6
v3.24.3
INVESTMENTS - Summary of investments (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 2,411,655 $ 1,053,859
Unrealized Gains 27,152 2,543
Unrealized Losses (1,131) (1,260)
Fair Value 2,437,676 1,055,142
U.S. treasury and agency securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 1,891,092 802,288
Unrealized Gains 24,133 1,689
Unrealized Losses (974) (1,062)
Fair Value 1,914,251 802,915
Corporate notes    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 481,698 234,908
Unrealized Gains 3,019 854
Unrealized Losses (157) (198)
Fair Value 484,560 235,564
Certificates of deposit    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 38,865 16,663
Unrealized Gains 0 0
Unrealized Losses 0 0
Fair Value $ 38,865 $ 16,663
v3.24.3
INVESTMENTS - Summary of investments in a gross unrealized loss position by length of time (Details)
$ in Thousands
Sep. 30, 2024
USD ($)
security
Dec. 31, 2023
USD ($)
security
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months, number of securities | security 165 133
Less than 12 months, fair value $ 554,429 $ 559,336
Less than 12 months, gross unrealized losses $ (1,064) $ (1,161)
12 months or longer, number of securities | security 7 23
12 months or longer, fair value $ 50,950 $ 30,096
12 months or longer, gross unrealized losses $ (67) $ (99)
U.S. treasury and agency securities    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months, number of securities | security 90 69
Less than 12 months, fair value $ 455,067 $ 480,312
Less than 12 months, gross unrealized losses $ (910) $ (995)
12 months or longer, number of securities | security 6 4
12 months or longer, fair value $ 47,680 $ 24,551
12 months or longer, gross unrealized losses $ (63) $ (67)
Corporate notes    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months, number of securities | security 75 64
Less than 12 months, fair value $ 99,362 $ 79,024
Less than 12 months, gross unrealized losses $ (154) $ (166)
12 months or longer, number of securities | security 1 19
12 months or longer, fair value $ 3,270 $ 5,545
12 months or longer, gross unrealized losses $ (4) $ (32)
v3.24.3
INVESTMENTS - Summary of contractual maturities of available-for-sale securities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Amortized Cost    
Due in one year or less $ 502,534 $ 690,694
Due after one year through five years 1,909,121 363,165
Amortized Cost 2,411,655 1,053,859
Fair Value    
Due in one year or less 503,784 689,833
Due after one year through five years 1,933,892 365,309
Fair Value $ 2,437,676 $ 1,055,142
v3.24.3
FAIR VALUE MEASUREMENTS - Schedule of assets and liabilities measured on recurring basis (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments $ 2,437,676 $ 1,055,142
U.S. treasury and agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 1,914,251 802,915
Corporate notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 484,560 235,564
Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 38,865 16,663
Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 95,844 434,330
Total 2,537,805 1,497,686
Recurring | U.S. treasury and agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 1,914,251 802,915
Recurring | Corporate notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 484,560 235,564
Recurring | Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 38,865 16,663
Restricted investments   2,478
Recurring | U.S. treasury securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Restricted investments 4,285 5,736
Level 1 | Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 95,844 434,330
Total 95,844 434,330
Level 1 | Recurring | U.S. treasury and agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 0 0
Level 1 | Recurring | Corporate notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 0 0
Level 1 | Recurring | Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 0 0
Restricted investments   0
Level 1 | Recurring | U.S. treasury securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Restricted investments 0 0
Level 2 | Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 0 0
Total 2,441,961 1,063,356
Level 2 | Recurring | U.S. treasury and agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 1,914,251 802,915
Level 2 | Recurring | Corporate notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 484,560 235,564
Level 2 | Recurring | Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 38,865 16,663
Restricted investments   2,478
Level 2 | Recurring | U.S. treasury securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Restricted investments 4,285 5,736
Level 3 | Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 0 0
Total 0 0
Level 3 | Recurring | U.S. treasury and agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 0 0
Level 3 | Recurring | Corporate notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 0 0
Level 3 | Recurring | Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 0 0
Restricted investments   0
Level 3 | Recurring | U.S. treasury securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Restricted investments $ 0 $ 0
v3.24.3
RESTRICTED CASH AND RESTRICTED DEPOSITS (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Cash and Cash Equivalents [Abstract]    
Restricted cash and cash equivalents $ 25,784 $ 21,656
Restricted investments 4,285 8,214
Restricted deposits $ 30,069 $ 29,870
v3.24.3
BENEFITS PAYABLE (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]        
Benefits payable, beginning of period $ 965,986 $ 937,727    
CAE payable, beginning of the period 13,192 12,712    
Benefits and CAE payable, beginning of period 1,375,486 922,857 $ 979,178 $ 950,439
Less: Reinsurance recoverable 57,111 277,944    
Benefits payable, net reinsurance recoverable, beginning of period 908,875 659,783    
Benefits and CAE payable, net, beginning of period 922,067 672,495    
Benefits Payable        
Current year 5,388,787 3,418,106    
Prior years (121,312) 18,679    
Claims incurred 5,267,475 3,436,785    
Unallocated Claims Adjustment Expense        
Current year 82,642 68,814    
Prior years 0 0    
Claims adjustment expense 82,642 68,814    
Total        
Current year 5,471,429 3,486,920    
Prior years (121,312) 18,679    
Total claims incurred and CAE, net 5,350,117 3,505,599    
Benefits Payable        
Current year 4,345,363 2,737,037    
Prior years 533,393 522,678    
Claims paid 4,878,756 3,259,715    
Unallocated Claims Adjustment Expense        
Current year 68,013 59,454    
Prior years 9,061 9,664    
CAE paid 77,074 69,118    
Total        
Current year 4,413,376 2,796,491    
Prior years 542,454 532,342    
Total claims and CAE paid, net 4,955,830 3,328,833    
Benefits payable, net reinsurance recoverable, end of period 1,297,594 836,853    
CAE payable, end of the period 18,760 12,408    
Benefits and CAE payable, net, end of period 1,316,354 849,261    
Add: Reinsurance recoverable 59,132 73,596    
Benefits payable, end of period 1,356,726 910,449    
Benefits and CAE payable, end of period $ 1,375,486 $ 922,857    
v3.24.3
DEBT - Narrative (Details)
1 Months Ended
Feb. 28, 2022
USD ($)
tradingDay
$ / shares
Sep. 30, 2024
USD ($)
Dec. 28, 2023
USD ($)
Feb. 21, 2021
USD ($)
Convertible debt | 7.25% Convertible Senior Notes Due 2031        
Debt Instrument [Line Items]        
Aggregate principal amount $ 305,000,000.0      
Stated interest rate 7.25%      
Conversion ratio 0.1201721      
Conversion price (in dollars per share) | $ / shares $ 8.32      
Threshold percentage of stock price trigger 130.00%      
Threshold trading days | tradingDay 20      
Threshold consecutive trading days | tradingDay 30      
Long-term debt, net   $ 299,400,000    
Unamortized debt discount and debt issuance costs   5,600,000    
Long-term debt, fair value   $ 807,000,000.0    
Effective interest rate   7.61%    
Line of credit | Revolving credit facility | Revolving Credit Agreement        
Debt Instrument [Line Items]        
Maximum borrowing capacity     $ 115,000,000  
Borrowing capacity, increase limit       $ 50,000,000
Line of credit outstanding   $ 0    
v3.24.3
DEBT - Schedule of debt interest expense (Details) - 7.25% Convertible Senior Notes Due 2031 - Convertible debt - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Debt Instrument [Line Items]        
Coupon interest expense $ 5,344 $ 5,528 $ 16,400 $ 16,584
Amortization of debt discount and issuance costs 194 195 583 584
Total interest expense $ 5,538 $ 5,723 $ 16,983 $ 17,168
v3.24.3
EARNINGS (LOSS) PER SHARE - Schedule of basic and diluted earnings per share (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Numerator:        
Net income (loss) attributable to Oscar Health, Inc. $ (54,596) $ (65,398) $ 178,979 $ (120,698)
Effect of convertible senior notes 0 0 17,459 0
Net income (loss) available to Oscar Health, Inc. common shareholders $ (54,596) $ (65,398) $ 196,438 $ (120,698)
Denominator:        
Weighted average shares of common stock outstanding, basic (in shares) 243,106,000 223,099,000 237,759,000 219,827,000
Common stock equivalents (in shares) 0 0 27,048,000 0
Effect of convertible senior notes (in shares) 0 0 36,652,000 0
Weighted-average shares of common stock outstanding and potential dilutive common shares outstanding (in shares) 243,106,000 223,099,000 301,459,000 219,827,000
Net Earnings (Loss) per Share        
Basic (in dollars per share) $ (0.22) $ (0.29) $ 0.75 $ (0.55)
Diluted (in dollars per share) $ (0.22) $ (0.29) $ 0.65 $ (0.55)
v3.24.3
EARNINGS (LOSS) PER SHARE - Schedule of antidilutive securities excluded from computation (Details) - shares
shares in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive securities excluded from computation (in shares) 78,844 98,224 1,660 98,224
Stock options to purchase common stock        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive securities excluded from computation (in shares) 18,698 27,016 1,291 27,016
Restricted stock units        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive securities excluded from computation (in shares) 16,040 25,206 369 25,206
Performance-based restricted stock units        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive securities excluded from computation (in shares) 7,453 9,350 0 9,350
Shares underlying convertible notes        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive securities excluded from computation (in shares) 36,653 36,652 0 36,652
v3.24.3
REINSURANCE - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Insurance [Abstract]          
Reinsurance, deposit liability $ 13.2   $ 13.2   $ 7.0
Reinsurance premiums ceded, percentage 51.00% 45.00% 53.00% 46.00%  
v3.24.3
REINSURANCE - Reinsurance Arrangements (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Policyholder Benefits and Claims Incurred, Net [Abstract]          
Direct claims incurred $ 1,986,189 $ 1,116,679 $ 5,189,901 $ 3,301,424  
Ceded reinsurance claims (41,171) (15,266) (90,823) (33,833)  
Assumed reinsurance claims 58,961 61,781 168,397 169,194  
Medical expenses 2,003,979 1,163,194 5,267,475 3,436,785  
Other Insurance Cost, Net [Abstract]          
Selling, general and administrative expenses, gross 459,522 325,820 1,289,362 1,060,636  
Reinsurance ceding commissions 855 30 383 976  
Selling, general and administrative expenses 460,377 $ 325,850 1,289,745 $ 1,061,612  
Reinsurance Recoverables, Including Reinsurance Premium Paid [Abstract]          
Reinsurance premium and claim recoverables 272,478   272,478   $ 224,837
Reinsurance ceding commissions 6,915   6,915   7,054
Experience refunds on reinsurance agreements (6,076)   (6,076)   9,303
Reinsurance recoverable $ 273,317   $ 273,317   $ 241,194
v3.24.3
BUSINESS ARRANGEMENTS - Variable interest entities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Variable Interest Entity [Line Items]    
Assets $ 4,483,015 $ 3,601,480
Liabilities 3,317,675 2,795,363
Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 135,610 125,709
Liabilities $ 77,320 $ 74,568
v3.24.3
CANCELLATION OF FOUNDERS AWARDS (Details) - USD ($)
$ in Millions
1 Months Ended
Mar. 28, 2023
Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Accelerated stock-based compensation expense   $ 46.3
PSUs | Founder, Mario Schlosser    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Shares canceled (in shares) 4,229,853  
PSUs | Founder, Joshua Kushner    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Shares canceled (in shares) 2,114,926  

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