Oscar Health growth ambitions: Doubled footprint, planned ICHRA products launch and more

Sensing an opportunity in the individual market, Oscar Health believes it is poised to expand and increase its market share, the company revealed ahead of its annual investor day June 7.

This year may be seen as the start of Oscar’s breakout story. The company recorded its first quarterly net profit last month, and CEO Mark Bertolini has said 2024 will be Oscar’s first profitable year.

As of April, there are 1.5 million Oscar members and the company holds 7% of the total Affordable Care Act (ACA) market share in 18 states.

In its presentation, the company detailed growth projections in its ACA business, its long-term vision for individual coverage health reimbursement arrangements (ICHRA) and Medicare Advantage, thoughts on the future of pharmacy benefit managers, plans to build upon its Spanish-language offerings, its strategic approach toward +Oscar and AI aspirations.

Expansion ahead

Oscar has plans to increase its footprint by 150 metro areas over the next three years, effectively doubling its current reach. It projects the expansion would grow the company’s market share from 13% now to 18% by 2027.

As Oscar enters its next stage by reaffirming its current year guidance, the insurer expects to achieve 20% revenue compound annual growth rate (CAGR), a 5% operating margin and $2.25 earnings per share (EPS) in 2027.

"We are not losing sight of the fact that we need to get to 5% margins," said Bertolini. "It's the first thing I think about every day."

From 2021 through 2023, membership CAGR was 37%, in addition to achieving seven points of medical loss ratio (MLR) improvement and 11 points of selling, general and administrative ratio. The company now wants an MLR of 80%, down 1.6% from 2023.

Last quarter, Oscar Health's $0.62 earnings per share (EPS) outperformed analysts’ projections.

Oscar remains bullish over the ACA market, noting potential for increased upside if the enhanced subsidies are extended. Since 2021, total ACA market growth has increased by 79% with 21 million members now enrolled in plans. The company expects total membership to climb to 24 million, or as high as 31 million if enhanced subsidies are extended.

That growth is driven by Medicaid redeterminations—where nearly a third of individuals who lose Medicaid are estimated to be eligible for ACA premium tax credits—and an increasingly large economy of gig workers and more adoption of ICHRA plans by employers.

"We believe the more likely scenario is that some solution will be found where some, or all, of those subsidies will continue," said CFO Scott Blackley, noting that subsidies do not need to be extended for Oscar to reach its targets.


The insurer intends to build its ICHRA carrier business, targeting small and medium-sized businesses. It will also look to bring in large employers in industries with high benefit costs.

Oscar’s leaders see value in ICHRA beyond 2027.

If all employers with less than 1,000 employees adopted ICHRA models today, Oscar's targetable market would grow from 21 million addressable lives to 96 million lives, once factoring in 75 million lives in the small group and middle market, CEO Mark Bertolini said during the presentation.

Starting in 2025, the company will launch new ICHRA products for members used to “richer plans.” They will include extra benefits, including health savings account compatibility.

"When people go from an employer plan to ICHRA, we do see them tend to buy more silver and gold plans, which are richer, and they're probably more akin to some of the PPOs they had when they were on an employer-sponsored plan," Chief Insurance Officer Alessa Quane told Fierce Healthcare.

Oscar intends to push ICHRA in markets with high employer group rates and where multiple health plans are already participating in the market.

PBM future

Bertolini issued a bold stance on the future of PBMs during the presentation: Without significant changes to its current business practices, their time is running out.

The insurer is watching Blue Shield of California's new PBM model closely, where the plan is dropping its exclusive ties with CVS Caremark in favor of relationships with Caremark, Amazon Pharmacy, Abarca, Mark Cuban Cost Plus Drug Company and Prime Therapeutics. Each partner is responsible for a different aspect of the pharmacy drug model. Blue Shield of California hopes to cut prescription drug costs by up to 15%.

"Whether you can coordinate it properly and make it work is the big question," Bertolini said of Blue Shield of California's new model. And if he was the CEO of a PBM today, he'd "start looking for another job," he quipped.

Oscar Health's contract with CVS Caremark expires at the end of 2026.

Artificial intelligence

A buzzword for some companies, Oscar contends AI and its technology stack will be at the heart of its insurance business growth.

“Our aspiration is to build the most automated health plan with zero manual intervention, zero errors and zero friction,” a presentation slide reads.

That transition appears to be underway. The company said it has a 98% claims auto-adjudication rate, or percentage of first-time claims not processed manually, from March to May 2024.

Oscar also said there are more than 20 AI use cases in the pipeline, as they look for solutions in claims adjudications, call centers, member engagement, clinical documentation and medical record data extraction.

Starting in August 2023, the company reduced provider documentation time in virtual care visits by 12.5 minutes. By the third quarter, they expect to reduce documentation time by five additional minutes through smarter care team messaging.

There has also been a 40% reduction in administrative effort during messaging encounters from January 2023 through April 2024, the company said.


The insurtech company intends to scale its +Oscar campaign builder and explore opportunities in Medicare Advantage.

Its campaign builder helps healthcare organizations fill technological niches the organization may be unable to solve on its own by fitting within existing workflows. Other payers can use the tool to reduce cost and improve health outcomes of its members.

Oscar plans to market the product toward regional health plans, capitated integrated delivery networks and independent accountable care organizations and management services organizations.

Currently, there are more than 200 health engagement campaigns running per month through +Oscar. The company chose to highlight client successes with the program during its investor day.

One client experienced a 118% year-over-year increase in annual wellness visits. Other successes include a 48% year-over-year increase in scheduled appointments and achieving a six times greater return on investment by switching from 30-day Rx refills to 90-day Rx refills.

In Medicare Advantage, Bertolini sees "a big opportunity" as the market "unravels" and plans report high levels of utilization.

"For us, that market is in turmoil," he said. "We see an opportunity of working with them [providers] going private-label in Medicare Advantage. That's specifically the kind of partner we're looking for [in +Oscar]." 

Still, Oscar is still working out what strategy is best for the company, said Quane. Oscar's three-year vision only briefly touched upon Medicare Advantage, choosing to focus on other business areas instead.

Hola Oscar

Though Oscar boasts a net promoter score (NPS) of 66 in the first quarter, its NPS jumps to 87 for the company’s Spanish speakers.

Oscar said it will continue to bring new experiences to Latino and Hispanic members, as well as condition-specific plans like its diabetes and COPD models.

Right now, Oscar's Spanish language experiences is fully launched in Georgia, but the plan is for program launches in more markets. Oscar will also look at other cultural segments to see if other underserved markets could benefit from a customized experience, said Quane.

The company argues this is a growing demographic for its members and has been for a long time. From 2015 to 2022, Hispanic and Latino ACA members increased by 66%.