Oscar Health (OSCR) Q1 FY26 earnings call: guidance and Q&A

Describe the behavior and expense accounting for the 200,000 members who churned between Q1 and April 1.

There were no unusual utilization patterns for churned members; most never made a payment. Claims are not paid once a member is delinquent, so no significant utilization was expected or observed for this group. The transition was in line with expectations.

“So I would say that for members who churned off, nothing unusual about any of the utilization patterns that we experienced in the first quarter. And those members, in general, the biggest portion of the drop-off really are people that never made a payment.”

asked by Jessica Tassan · answered by Richard Blackley

Do you agree with Wakely's assessment of market morbidity being up 2.9% to 6.5% in 2026, and what is Oscar's membership morbidity trend?

The Wakely report is a positive development, and its data is in line to favorable with Oscar's expectations, pointing to market morbidity as a potential tailwind. Oscar's current risk adjustment accruals have not yet factored in this potential favorability, awaiting more signals.

“I would describe it as in line to favorable with our expectations. And when I look at our claims experience, kind of what we're seeing through that report and other reports, really does point to market morbidity that could be a tailwind for us this year.”

asked by Jessica Tassan · answered by Richard Blackley

Given Q1 SG&A ratio of 15.2% and revenue suppressed by risk adjustment, why wouldn't G&A increase if revenue lifts later in the year?

SG&A dollars grew 46%, less than revenue growth, indicating leverage. The Q1 SG&A ratio is likely the lowest for the year due to normalization for higher membership. The ratio is expected to move sideways to slightly up, with Q4 typically higher due to open enrollment efforts.

“I would think that from here, we'll probably see membership or SG&A ratio moving sideways to slightly up. And the fourth quarter tends to be a little bit higher as we start to pick up expenses associated with OE efforts.”

asked by John Ransom · answered by Richard Blackley

Why is the Q1 risk adjustment transfer tracking at 24% compared to the 20% full-year expectation, and how will it moderate?

Q1 medical claims were seasonally low and favorable, leading to a higher risk adjustment accrual. The ratio is expected to normalize to 20% over the year as new members engage with benefits and members in higher deductible Bronze plans meet their deductibles.

“We expect that we'll get to that 20% during the course of the year as those new members and use their benefits and as members with higher deductible plans like in Bronze start to hit those deductibles.”

asked by Andrew Mok · answered by Richard Blackley

What are the key remaining swing factors that could materially shift the 2026 EBITDA outlook?

The primary swing factors are the Wakely numbers and risk adjustment. Claims will develop more fully by the end of Q2, providing a clearer and more pinpointed view.

“It's largely the weekly numbers and risk adjustment. And given if you look at the year-over-year differences between our risk adjustment at this point last year, which was 11%, Scott, and we're now at 24.5%.”

asked by Samuel Becker · answered by Mark Bertolini

Provide details on the financial impact of the Lucie Health Marketplace in 2026 and future years, including revenue/EBIT contribution and growth strategy.

All costs and revenues for Lucie are included in current guidance, with a modest effect expected for 2026. Long-term, it's anticipated to be a fast-growing, high-margin business, with higher dollar margins than ACA insured members and no risk capital requirements. More details will be provided at Investor Day.

“But the more important part is, and this is where the economics matter, and we'll dimension this more in September, is that the margin from a dollar standpoint is higher than any insured member would bring us inside the ACA for all the employees, and it's unregulated from the standpoint of having to put up any risk capital.”

asked by Olivia Miles · answered by Mark Bertolini