Oscar Health Q3 2026 Earnings: Improved Underwriting Drives a Profit Turnaround

Oscar Health (NYSE: OSCR) reported Q3 2026 revenue of $5.14 billion, up approximately 72% from $2.99 billion a year earlier, while diluted EPS improved to $0.49 from a loss of $0.53. Higher membership and rates supported revenue, while disciplined pricing lowered the medical loss ratio and helped operating results turn profitable.

Core Earnings Data

For the quarter ended September 30, 2026, Oscar generated $178.0 million in operating earnings, compared with a $129.3 million operating loss in Q3 2025. Net income attributable to Oscar reached $167.3 million, while adjusted EBITDA turned positive at $206.9 million.

The medical loss ratio, or MLR, declined as premium revenue grew faster than medical expenses. The SG&A expense ratio also fell as Oscar gained fixed-cost leverage and maintained expense discipline.

Adjusted EBITDA is a non-GAAP measure. The operating margins above are calculated from reported revenue and operating earnings.

Membership and Premium Growth

Effectuated membership increased approximately 27% to 2.692 million from 2.117 million a year earlier. The Individual and Small Group reporting category accounted for all current membership, while the former Cigna+Oscar arrangement had no members, compared with 5,168 in September 2025.

Premium revenue increased approximately 72% to $5.042 billion from $2.924 billion. That growth substantially exceeded membership growth, reflecting the combination of rate increases and the effect of updated risk-adjustment estimates.

Profitability, Cash Flow, and Balance Sheet

Medical expenses rose approximately 64% to $4.233 billion, slower than premium revenue growth and therefore supportive of the lower MLR. SG&A expenses increased approximately 38% to $721.9 million, but the expense ratio declined because revenue grew faster and fixed costs were spread across a larger business.

Cash-flow figures were reported for the first nine months rather than the quarter alone. Nine-month operating cash flow was $3.511 billion, up from $423.0 million in the comparable 2025 period. The increase included $1.896 billion from higher payables to the Centers for Medicare & Medicaid Services and $468.7 million from higher benefits payable, in addition to $1.208 billion of year-to-date net income.

At September 30, cash and cash equivalents stood at $4.467 billion, compared with $2.774 billion at the end of 2025. Short-term investments increased to $3.022 billion from $1.216 billion, while long-term debt was relatively stable at $432.4 million. Payables to CMS also rose to $4.626 billion from $2.730 billion, showing that balance-sheet movements contributed materially to the cash increase.

Risk Adjustment Boosted Revenue, While Pricing Drove the MLR Improvement

Q3 revenue included a $250 million benefit from updated risk-adjustment estimates, equal to approximately 5% of quarterly revenue. Oscar attributed the adjustment to favorable development in its risk scores relative to the market and modestly favorable market morbidity compared with expectations.

Risk adjustment also affects the net-premium denominator used to calculate MLR. However, management identified disciplined pricing as the primary reason for the lower loss ratio. Favorable prior-period development was $42 million, down from $84 million a year earlier, indicating that the MLR improvement did not depend on a larger prior-period benefit.

Full-Year 2026 Guidance

Oscar raised all four of its key full-year ranges after Q3. The lower MLR and SG&A ratio ranges indicate improved cost expectations, while the operating earnings outlook was raised for the third time, according to management.

The updated outlook implies that Oscar expects its year-to-date underwriting and expense improvements to support stronger full-year profitability.

Management Commentary

CEO Mark Bertolini attributed the improving economics to disciplined pricing, consumer-focused products and Oscar’s technology-based operating approach. Management also said these capabilities position the company to pursue market-share growth and margin expansion in 2027, although no quantitative 2027 guidance was provided.

Recent Insider Transactions

Over the past six months, insiders purchased 1,867,375 shares in eight transactions and sold 4,694,417 shares in 19 transactions, resulting in net sales of 2,827,042 shares. Total insider holdings were reported at 15.91 million shares, with a net purchase-and-sale percentage of negative 15.10%.

The valid entries among the 10 most recent reported records were sales. These disclosures describe the transactions but do not establish the insiders’ reasons for selling.

Risks Investors Should Watch

• Risk-adjustment volatility: The $250 million estimate benefit materially supported Q3 revenue. Changes in risk scores, market morbidity or later estimates could affect revenue and MLR in future periods.
• Medical-cost execution: Oscar’s improved profitability depends on pricing continuing to cover claims costs. Unexpected utilization or higher morbidity could reverse part of the MLR improvement.
• ACA and regulatory changes: The expiration of enhanced Advanced Premium Tax Credits, new program-integrity requirements and other ACA-related rule changes could affect affordability, enrollment and plan economics.
• Cash-flow composition: Nine-month operating cash flow benefited substantially from increases in CMS and benefits payables. Cash generation may not track net income consistently as those balances change.
• Managing membership growth: A larger member base increases premium revenue but also expands claims exposure and operational requirements, making accurate pricing and medical-cost estimation increasingly important.

Conclusion

Oscar Health’s Q3 2026 results showed a clear shift from operating losses to profitability as membership, rates and improved underwriting lifted revenue faster than medical and administrative costs. The raised full-year outlook reinforces that improvement, but the contribution from risk-adjustment estimates and payable-driven cash flow makes future MLR trends, regulatory developments and the quality of cash generation important areas to monitor.