Oscar Health (OSCR) stock fell 10.66% to $26.90 in late-morning trading, even after the insurer reported stronger second-quarter earnings and improved full-year guidance. The company posted revenue growth, lower medical costs, and a swing to profitability, but the market still sold off the shares after the release. Oscar, a technology-driven health insurer focused primarily on the Affordable Care Act (ACA) individual marketplace, has been one of the faster-growing public insurers by membership in recent years.

Oscar Health Posts Record Second-Quarter Profit

Oscar Health generated $4.88 billion in second-quarter revenue, up from $2.86 billion in the same period a year earlier. Higher membership and insurance rates drove the increase, although risk adjustment transfers—a mechanism under the ACA that shifts payments between insurers based on the relative health risk of their enrolled populations—reduced part of the gain. The company continued expanding its scale in the individual health insurance market.

Operating income reached $388.6 million, reversing a $230.5 million operating loss in the prior-year quarter. Net income rose to $361.8 million, compared with a $228.4 million loss a year earlier. Diluted earnings came in at $1.10 per share, versus a loss of $0.89 per share previously.

Adjusted EBITDA improved to $415.3 million from a $199.4 million loss in the year-ago quarter. The medical loss ratio fell to 79.2% from 91.1% in the prior-year period. Oscar said disciplined pricing and $164 million in favorable reserve development—reflecting prior-period claim estimates that came in lower than originally projected—contributed to the improvement.

Oscar Health Raises 2026 Operating Guidance

Oscar Health left its 2026 revenue forecast unchanged at $18.7 billion to $19.0 billion. However, the company raised its projected operating income to a range of $500 million to $700 million, up from a prior forecast of $250 million to $450 million. Because favorable reserve development is generally a non-recurring item, the raised operating income range implies confidence in underlying underwriting performance beyond the second-quarter benefit.

The insurer also lowered its expected medical loss ratio to 81.5% to 82.5%, compared with its earlier estimate of 82.4% to 83.4% for the full year. The updated range points to stronger underwriting performance and tighter control over medical expenses.

Oscar Health reduced its projected SG&A expense ratio to 15.6% to 16.1%, from a previous range of 15.8% to 16.3%. The revised outlook reflected better cost leverage and disciplined expense management.

Membership Growth Supports the Business

Oscar Health ended June with 2.96 million members across its individual and related insurance offerings, up from 2.03 million in the same period of 2025. The increase highlights continued demand in the individual health insurance market, a segment that has grown nationally as ACA marketplace enrollment reached record levels in recent years.

The company exited small group plans and its former Cigna partnership. Oscar Health now focuses mainly on individual coverage, including employer-funded reimbursement arrangements. That approach gives the company greater exposure to workers moving between jobs and employment models.

Oscar Health has also relied on pricing controls and technology investments to support growth and profitability. The second-quarter results showed stronger underwriting, lower expenses, and a broader membership base, even as the stock fell sharply after the report.