Oscar Health Inc (NYSE: OSCR) experienced a notable decline in share price on Tuesday morning as investors digested a combination of regulatory updates and sector earnings that collectively cast uncertainty over the company's near-term prospects. The simultaneous impact of a surprisingly low Medicare Advantage payment proposal from the Centers for Medicare & Medicaid Services (CMS) and a disappointing earnings report from industry giant UnitedHealth Group has contributed to the sell-off, highlighting concerns over reimbursement rates and medical cost inflation within the health insurance landscape.
Medicare Advantage Payment Proposal Significantly Below Market Expectations
CMS recently unveiled its proposed Medicare Advantage payment changes for the 2027 plan year, signaling only a marginal average rate increase of 0.09%. This figure stands in stark contrast to Wall Street's forecasts, which had anticipated a rise between 4% and 6%. For Oscar Health, a health insurer that increasingly depends on Medicare Advantage products in addition to its foundational ACA marketplace and small-group insurance offerings, this minimal increase substantially restricts potential premium pricing flexibility. The limited growth in reimbursement rates challenges Oscar's ability to offset escalating medical costs.
Moreover, the proposal introduces more stringent risk-adjustment rules. By excluding diagnoses documented through audio-only telehealth visits and select chart reviews from risk score calculations, CMS effectively reduces the risk scores attributed to insurers leveraging virtual care and advanced data-driven coding practices. Given that Oscar Health's business model heavily incorporates virtual care services and data analytics to enhance coding accuracy, these adjustments could have an adverse impact on the company's revenue under Medicare Advantage plans.
UnitedHealth's Financial Results Intensify Concerns Over Medical Expenses
The sector's apprehension deepened after UnitedHealth Group reported its fourth-quarter 2025 results, which revealed a medical care ratio near 92%, substantially higher than in previous periods. For the full year, UnitedHealth's medical care ratio averaged 89.1%, reflecting an increase of approximately 340 basis points compared to 2024. This uptick indicates that medical expenses are rising faster than expected, a trend that raises concerns about the sustainability of profit margins across the health insurance industry.
Although UnitedHealth provided earnings per share (EPS) growth guidance for 2026, its revenue outlook—projected to exceed $439 billion—fell short of analyst consensus estimates. This suggests that top-line expansion may remain constrained even for one of the industry's leading players.
Technical Indicators Point to Bearish Momentum for Oscar Health
From a market technical perspective, Oscar Health's stock is showing bearish tendencies. Currently, the shares trade approximately 6.8% below their 20-day simple moving average (SMA) and about 14.2% below their 100-day SMA. These metrics indicate downward momentum in the short to medium term.
Over the past year, Oscar Health's share price has declined by 7.88%. The stock also sits nearer to its 52-week low than its high, signaling persistent challenges in regaining ground. The Relative Strength Index (RSI) stands at 45.56, which is within neutral territory, whereas the Moving Average Convergence Divergence (MACD) remains below its signal line, pointing to bearish pressure. This combination of neutral RSI and negative MACD highlights mixed sentiment and unclear momentum in the near term.
Key price levels identified by technical analysis include resistance at $16.50 and support at $14.50.
Oscar Health’s Business Focus and Services
Oscar Health specializes in providing health insurance plans tailored to individuals, families, and employee groups. In addition to their traditional offerings through the ACA marketplace and small-group plans, the company increasingly focuses on the Medicare Advantage segment, targeting adults aged 65 and older.
Complementing its insurance products, Oscar Health emphasizes technology-driven services such as virtual care access, doctor support, and appointment scheduling tools. These features are integral to their service model and play a critical role in their care delivery approach.
Upcoming Earnings Expectations and Analyst Sentiment
Looking ahead, Oscar Health is scheduled to report its next earnings results on February 10. Analysts anticipate an EPS loss of 89 cents, reflecting a decline from a 62-cent loss during the previous year. Revenue is expected to grow to approximately $3.16 billion, up from $2.39 billion year over year.
Market consensus maintains a Hold rating on the stock, accompanied by an average price target of $14.64. Recent analyst actions include upgrades from UBS and Barclays, raising price targets to $17.00 and $18.00 respectively, alongside an initiation of coverage by Stephens & Co. with an Equal-Weight rating and a $17.00 target.
Benzinga Edge Score Reflects Weak Momentum
The Benzinga Edge scoring system classifies Oscar Health's current momentum as weak, with a score of 33.95. This rating indicates that the stock is underperforming relative to the broader market. Despite challenges highlighted in technical and fundamental metrics, the company may find opportunities for recovery if it can effectively leverage recent legislative developments.
Summary of Stock Movement
On Tuesday, Oscar Health shares traded down 4.33%, reaching $15.02 at the time of this report based on Benzinga Pro data.
Key Points:
Risks and Uncertainties:
Medicare Advantage Payment Proposal Significantly Below Market Expectations
CMS recently unveiled its proposed Medicare Advantage payment changes for the 2027 plan year, signaling only a marginal average rate increase of 0.09%. This figure stands in stark contrast to Wall Street's forecasts, which had anticipated a rise between 4% and 6%. For Oscar Health, a health insurer that increasingly depends on Medicare Advantage products in addition to its foundational ACA marketplace and small-group insurance offerings, this minimal increase substantially restricts potential premium pricing flexibility. The limited growth in reimbursement rates challenges Oscar's ability to offset escalating medical costs.
Moreover, the proposal introduces more stringent risk-adjustment rules. By excluding diagnoses documented through audio-only telehealth visits and select chart reviews from risk score calculations, CMS effectively reduces the risk scores attributed to insurers leveraging virtual care and advanced data-driven coding practices. Given that Oscar Health's business model heavily incorporates virtual care services and data analytics to enhance coding accuracy, these adjustments could have an adverse impact on the company's revenue under Medicare Advantage plans.
UnitedHealth's Financial Results Intensify Concerns Over Medical Expenses
The sector's apprehension deepened after UnitedHealth Group reported its fourth-quarter 2025 results, which revealed a medical care ratio near 92%, substantially higher than in previous periods. For the full year, UnitedHealth's medical care ratio averaged 89.1%, reflecting an increase of approximately 340 basis points compared to 2024. This uptick indicates that medical expenses are rising faster than expected, a trend that raises concerns about the sustainability of profit margins across the health insurance industry.
Although UnitedHealth provided earnings per share (EPS) growth guidance for 2026, its revenue outlook—projected to exceed $439 billion—fell short of analyst consensus estimates. This suggests that top-line expansion may remain constrained even for one of the industry's leading players.
Technical Indicators Point to Bearish Momentum for Oscar Health
From a market technical perspective, Oscar Health's stock is showing bearish tendencies. Currently, the shares trade approximately 6.8% below their 20-day simple moving average (SMA) and about 14.2% below their 100-day SMA. These metrics indicate downward momentum in the short to medium term.
Over the past year, Oscar Health's share price has declined by 7.88%. The stock also sits nearer to its 52-week low than its high, signaling persistent challenges in regaining ground. The Relative Strength Index (RSI) stands at 45.56, which is within neutral territory, whereas the Moving Average Convergence Divergence (MACD) remains below its signal line, pointing to bearish pressure. This combination of neutral RSI and negative MACD highlights mixed sentiment and unclear momentum in the near term.
Key price levels identified by technical analysis include resistance at $16.50 and support at $14.50.
Oscar Health’s Business Focus and Services
Oscar Health specializes in providing health insurance plans tailored to individuals, families, and employee groups. In addition to their traditional offerings through the ACA marketplace and small-group plans, the company increasingly focuses on the Medicare Advantage segment, targeting adults aged 65 and older.
Complementing its insurance products, Oscar Health emphasizes technology-driven services such as virtual care access, doctor support, and appointment scheduling tools. These features are integral to their service model and play a critical role in their care delivery approach.
Upcoming Earnings Expectations and Analyst Sentiment
Looking ahead, Oscar Health is scheduled to report its next earnings results on February 10. Analysts anticipate an EPS loss of 89 cents, reflecting a decline from a 62-cent loss during the previous year. Revenue is expected to grow to approximately $3.16 billion, up from $2.39 billion year over year.
Market consensus maintains a Hold rating on the stock, accompanied by an average price target of $14.64. Recent analyst actions include upgrades from UBS and Barclays, raising price targets to $17.00 and $18.00 respectively, alongside an initiation of coverage by Stephens & Co. with an Equal-Weight rating and a $17.00 target.
Benzinga Edge Score Reflects Weak Momentum
The Benzinga Edge scoring system classifies Oscar Health's current momentum as weak, with a score of 33.95. This rating indicates that the stock is underperforming relative to the broader market. Despite challenges highlighted in technical and fundamental metrics, the company may find opportunities for recovery if it can effectively leverage recent legislative developments.
Summary of Stock Movement
On Tuesday, Oscar Health shares traded down 4.33%, reaching $15.02 at the time of this report based on Benzinga Pro data.
Key Points:
- CMS proposed a nearly flat Medicare Advantage payment increase of 0.09% for 2027, well below anticipated 4%-6% hikes.
- Changes in risk adjustment exclude certain virtual care diagnoses, impacting Oscar Health's revenue model.
- UnitedHealth’s higher medical care ratios and below-consensus revenue guidance signal rising cost pressures across the sector.
- Oscar Health's stock displays technical weakness, trading below key moving averages with mixed momentum indicators.
Risks and Uncertainties:
- Minimal Medicare Advantage rate increases limit Oscar Health's pricing flexibility amid escalating medical costs.
- Risk-adjustment methodology revisions may reduce revenue from Oscar's virtual care services.
- Rising medical utilization, as demonstrated by UnitedHealth's results, could increase expense ratios industry-wide.
- Market volatility and mixed technical signals maintain uncertainty around the stock’s short-term trajectory.