Oscar Health posts $610M net loss in 2022

Oscar Health posts $610M net loss in 2022 unknown

Oscar Health saw an improvement in vital financial metrics in 2022 and beat analysts’ expectations, prompting a boost in share price.

For the 2022 fiscal year, the insurtech saw an improvement in its medical loss ratio from 88.9% in 2021 to 85.3% in 2022. Its administrative expense ratio also dropped from 21.8% to 20.6%. The company’s net loss of $226.6 million in the fourth quarter of 2022 beat analyst expectations of a loss of $261.3 million.

While Oscar saw a net loss of $610 million in 2022, an increase from a loss of $571 million, it forecasted a much more tolerable 2023. The company said it would lose between $75 million and $175 million in 2023. Executives said the company was on track to be profitable by the end of 2024 and would continue to improve its margins.

“We believe we are better positioned than ever before to hit profitability based on disciplined execution,” Oscar Health CEO and co-founder Mario Schlosser said on the earnings call.

The strategy was welcomed by Wall Street. Oscar Health’s stock price was up 30.7% from $3.90 per share at the start of Friday to $4.95 at the close of business.

Schlosser said Oscar Health would continue to focus on improving efficiency and profitability without making major investments.

Oscar said in December it planned to halt individual market insurance sales in Florida weeks before the end of the open enrollment period. In November, the company effectively ended its Medicare Advantage business. In August, it stopped offering tech services to help other insurers and providers transition to risk-based payment models.

But some remain skeptical about Oscar’s prospects. Ari Gottlieb, a principal at A2 Strategy Group, said the fundamentals of the business haven’t changed.

“I don’t think being an individual only player is actually a viable business model long term,” Gottlieb said. “They will never have scale in the local market to negotiate with providers for really aggressive rates.”

Gottlieb said the company’s finances were boosted by investment income related to high interest rates. Oscar said on the call its investment revenue of $25 million in the fourth quarter contributed to it beating expectations. This revenue from these investments totaled only $334,000 last year.

Nona Tepper contributed to the reporting of this story.