Oscar Health net loss up in 2022
Oscar Health posted some important financial gains last year and beat analysts’ expectations for the fourth quarter, pushing its stock price up on Friday.
The company said on Thursday that the insurance company’s medical loss ratio improved from 88.9% in 2021 to 85.3% last year, while its administrative expense ratio fell from 21.8% to 20.6%. Oscar Health posted a net loss of $226.6 million in the fourth quarter, beating analysts’ expectations of a $261.3 million net loss.
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In 2022, Oscar Health suffered a net loss of $610 million compared to $571 million a year earlier, but the insurance company is predicting a better 2023. The company expects to lose between $75 million and $175 million this year. Executives said Oscar Health will turn a profit by the end of next year and continue to increase its profits.
“We believe we are better placed than ever before to achieve profitability through disciplined execution,” Oscar Health CEO and co-founder Mario Schlosser said during a call with investors on Thursday.
Wall Street cheered the news, with Oscar Health stock opening Friday at $3.90 a share and closing at $4.95, up 30.7%.
According to Schlosser, Oscar Health will continue to focus on efficiency and profitability without making large investments. The company reduced its activities due to financial difficulties.
In December, Oscar Health announced that href=”https://www.modernhealthcare.com/insurance/oscar-health-new-florida-members”>will stop selling on the individual market in Florida weeks before the end of open enrollment on exchanges medical insurance. The company effectively closed its Medicare Advantage business a month earlier. And in August, Oscar Health stopped offering technology services to insurers and providers moving to risk-based payment models.
Some remain skeptical of the insurer’s prospects. The fundamentals haven’t changed, said Ari Gottlieb, director of the A2 Strategy Group. “I don’t think being an individual player is actually a viable business model in the long run,” he said. “They will never have the scale in the local market to negotiate with suppliers at really aggressive prices.”
Oscar Health’s recent finances have been bolstered by investment income linked to high interest rates, executives acknowledged during a call with investors. Oscar Health received $25 million in investment in the fourth quarter, up from $334,000 in the last quarter of 2021, up 7,385%.
This story first appeared in Digital Health Business & Technology.