Oscar Health (NYSE: OSCR) has positioned itself for a potential turnaround, with CEO Mark Bertolini asserting that 2026 will mark the year the company finally achieves profitability. Despite reporting a fourth-quarter earnings per share (EPS) of -$1.24, which fell short of analysts’ expectations of -$0.92, Oscar’s stock surged by approximately 9.6% as investors focused on the company’s promising outlook.
In its Q4 results, Oscar’s medical loss ratio (MLR) reached an alarming 95.4%, a significant increase from 88.1% the previous year, indicating that the company spent 95 cents on medical costs for every dollar earned in premiums. Despite these challenges, Bertolini emphasized that Oscar is on track for a “significant year-over-year improvement of nearly $750 million in earnings from operations in 2026.” The expected range for earnings in 2026 is set between $250 million and $450 million, a stark contrast to the anticipated loss of $396 million in 2025.
Strategies for Improvement
Achieving this ambitious target hinges on substantial changes in Oscar’s operational strategies. Bertolini outlined three critical levers that the company plans to utilize: enhanced efficiency through artificial intelligence (AI), disciplined pricing, and an increase in membership.
The first lever, AI-driven efficiency, has shown promising results. Bertolini noted that the company’s Agentic AI bot for care guides has reduced response times by 67% during peak enrollment periods. Additionally, Oscar’s health agent, named Oswell, now accurately addresses 86% of member inquiries, significantly enhancing customer service.
The second lever is pricing discipline. Oscar has implemented an average rate increase of approximately 28% for 2026, reflecting the expiration of enhanced premium tax credits that had previously attracted higher-risk members. This strategic adjustment aims to stabilize the financial health of the company by ensuring that premiums align with the risk profile of enrolled members.
The third lever is a record membership growth, with Oscar reporting 3.4 million members as of February 1, 2026. This figure represents a notable increase compared to previous years, allowing the company to spread its fixed costs over a larger member base. Furthermore, Oscar’s market share in its operating regions has expanded from 17% in 2025 to 30% in 2026, partially due to the exit of CVS Health from the individual Affordable Care Act (ACA) exchange market.
Challenges Ahead
While the outlook is optimistic, the path to profitability is fraught with risks. Bertolini has made similar assertions regarding the company’s profitability in prior quarters, but the MLR has consistently deteriorated. The company’s capacity to achieve its 2026 guidance relies on effectively executing its pricing, underwriting, and AI efficiency strategies concurrently.
Oscar currently holds $2.77 billion in cash and has secured a new $475 million revolving credit facility, providing a financial cushion as it seeks to implement these changes. Whether Bertolini’s assertions will materialize remains to be seen, but the strategic measures in place signal a determined effort to pivot towards a profitable future.
