We came across a bullish thesis on Oscar Health, Inc. on RM Capital Partnership’s Substack by RM Capital Partnership. In this article, we will summarize the bulls’ thesis on OSCR. Oscar Health, Inc. ‘s share was trading at $16.66 as of August 29th.
Oscar Health (OSCR) reported Q2 2025 results that highlighted both near-term challenges and long-term strategic progress. The company faced elevated medical costs, pushing its medical loss ratio (MLR) to 91.1% due to higher-than-expected morbidity and risk adjustment accruals. Despite this, operating efficiency improved, with SG&A declining to 18.7% from 19.6% a year ago, reflecting better fixed-cost leverage and lower exchange fees.
Oscar reaffirmed its 2025 guidance, targeting an MLR of 86–87%, SG&A of 17.1–17.6%, and operating losses of $200–$300 million, with adjusted EBITDA losses about $120 million lower than the operating loss. To protect margins, the company is executing $60 million in cost savings through workforce reductions, AI-driven automation, and medical cost containment initiatives, while ending the quarter with strong liquidity to support operations without raising capital.
Strategically, Oscar continues to expand its Individual Coverage Health Reimbursement Arrangement (ICHRA) business, positioning it as a high-margin growth engine. The Hy‑Vee co-branded ICHRA plan enhances customer access through 570+ retail locations and 270 pharmacies, combining concierge care with broad distribution. Key acquisitions, including IHC Specialty Benefits, INSXCloud, and HealthInsurance.org, strengthen Oscar’s control over distribution, technology, and education, allowing the company to manage customer acquisition, onboarding, and support across individual and ICHRA markets.
Oscar reaffirmed its 2027 profitability targets, aiming for sustainable 5% operating margins and adjusted EBITDA profitability by 2026, leveraging rate corrections, medical cost programs, SG&A efficiency, and a vertically integrated ICHRA model. While near-term headwinds remain, the company’s strategic moves and strong liquidity provide confidence in long-term growth and profitability, making it a compelling position for investors seeking exposure to a differentiated health insurance platform.
Previously we covered a bullish thesis on Oscar Health, Inc. by Oguz Erkan in May 2025, which highlighted the company’s ACA marketplace adoption, tech-driven member experience, improving margins, and large addressable market. The company’s stock price has appreciated approximately by 32% since our coverage, reflecting strong execution. RM Capital Partnership shares a similar bullish view but emphasizes near-term cost controls and expansion of the ICHRA business.
