Just two months after detailing its long-term expansion plan, Oscar Health reported a second consecutive month of quarterly net profit.
The company relayed a net income of $56.2 million for the quarter, a $71.7 million improvement year over year. Its earnings per share of $0.20 narrowly beat analysts’ projections of $0.16.
Its revenue rolled in at $2.2 billion, a 46% increase from last year.
“Oscar reported strong second quarter results, closing out the best six months in the company's history," said CEO Mark Bertolini in a news release. “We continued to report robust revenue growth, improved operating margin, and strong bottom line performance.”
As such, the company raised its full-year guidance. Last quarter, Oscar expected to make up to $8.4 billion in revenue this year. Oscar expects to earn at least $9 billion. Its adjusted earnings before interest, taxes, depreciation and amortization range increased by $35 million on both ends, now at $160 million to $210 million.
Additionally, Oscar is projecting a higher medical loss ratio (MLR) from 80.5% to 81.5% and a lower selling, general and administrative (SG&A) expenses ratio hovering around 20%. This quarter Oscar recorded a MLR of 79% and an SG&A expense ratio of 19.6%.
Although Oscar lost its 1,800 Medicare Advantage members after leaving the market, the company has gained more than 600,000 members in its individual and small group offering year over year.
Bertolini said on the earnings call the company grew in 80% of the states where Oscar operates in the last year, and reiterated its growth strategy to double its market, but not necessarily state, footprint.
He highlighted two campaigns that led to business growth. One model tracked member search terms and records to locate members requiring immediate care, helping Oscar lower emergency room admission rates and saving $18 million.
It also drove a 18% year-over-year increase in annual wellness visits for people with chronic conditions through an engagement campaign for a +Oscar client.
Days after Cigna insurance CEO Brian Evanko downplayed individual coverage health reimbursement arrangements (ICHRA), Bertolini said the company is staying the course and is “bullish” on the segment.
“The ICHRA value proposition is resonating in the market and at state policy levels,” he explained. “States including Indiana and Texas are enacting laws and considering legislation to make it easier for small businesses to adopt ICHRA. We expect other states to follow suit.”
During its most recent investor day, Oscar executives said it expects to reach long-term profitability goals regardless of whether the Affordable Care Act (ACA) subsidies are extended. Despite some rhetoric from former President Trump indicating he would attempt to torch the landmark legislation, Oscar CFO Scott Blackley said they feel positive as the election approaches.
“We are seeing a notable shift in sentiment from federal and state policymakers,” he said. “They are moving beyond repeal and replace to creating constructive solutions that position their marketplaces to better serve more Americans.”