Oscar Health Reports First Profitable Year as Digital Mix Drives Engagement

The U.S. healthcare sector has undergone a rapid digital transformation in recent years, driven by a combination of regulatory shifts, consumer demand and technological advancements.

The pandemic accelerated the adoption of telemedicine, remote monitoring and artificial intelligence (AI)-driven diagnostics, making digital health an essential component of modern care delivery.

Against that backdrop, healthcare technology company Oscar Health reported positive fourth-quarter 2024 and full-year financial results Tuesday (Feb. 4), stressing to investors that as consumers expect on-demand, tech-enabled healthcare experiences, Oscar Health’s digital-first strategy aligns with broader market trends.

“Oscar capped the strongest year of financial performance in company history,” said Mark Bertolini, CEO of Oscar Health. “Our strong top and bottom line performance, all-time-high-membership and consistent execution demonstrate our ability to deliver sustained profitable growth.”

The company’s total revenue for the 2024 fiscal year was $9.2 billion, marking a 56.5% increase from the previous year. Oscar reported a $25 million profit for the year, despite losing $153.5 million in the fourth quarter.

Since its founding in 2012, Oscar had yet to turn a profit for a full year. The question now is whether Oscar can continue to execute its vision profitably while maintaining its commitment to innovation.

The company’s stock is trading down nearly 18% after hours as of reporting.

Read more: Unlocking the Future of Digital Health at the World Economic Forum

The Rise of Digital Health Represents an Industry Shift

The healthcare industry sits at the intersection of innovation and evolving patient expectations.

Oscar Health’s focus on leveraging technology to enhance member experiences and streamline operations has been central to its strategy. The company’s full-stack technology platform aims to provide superior experiences, deep engagement and high-value clinical care, earning the trust of its growing member base.

Oscar’s substantial revenue growth for the year was primarily driven by increased membership during the 2024 Open Enrollment period, strong member retention and additional enrollments during the Special Enrollment Period (SEP).

As of Dec. 31, Oscar Health’s membership totaled approximately 1.7 million, up from 1 million at the end of 2023. This growth was primarily in the Individual and Small Group segments, which saw membership increase to 1,650,000 from 967,000 in the prior year.

The slight uptick in the Medical Loss Ratio (MLR) was attributed to SEP membership growth and an increase in risk adjustment transfers, partially offset by favorable prior period developments. The improvement in the SG&A Expense Ratio was due to better fixed cost leverage and efficiencies in variable costs.

Looking ahead to 2025, Oscar has introduced a new performance metric, Earnings from Operations. Oscar Health anticipates Total Revenue in the range of $10 billion to $10.2 billion, an MLR between 80.5% and 81.5%, an SG&A Expense Ratio of 18.0% to 18.5%, and Earnings from Operations of $150 million to $200 million.

Read more: Personalized Digital Campaigns Drew 600,000 Members to Oscar Health

Oscar Health’s Digital-First Model

Still, while Oscar has successfully grown its membership base, it has struggled to achieve consistent profitability.

Unlike many incumbent insurers, Oscar has prioritized a tech-driven approach to health coverage since its founding in 2012. With a strong focus on mobile engagement, telehealth integration and AI-powered decision-making, the company has sought to differentiate itself in an increasingly crowded market.

“The healthcare consumer is a smarter consumer today than ever before, they’re shopping around and they want to work with providers that not only deliver a solid healthcare experience, but also [work with] them on managing what the costs are going to be,” Erin Gadhavi, senior vice president, general manager, wellness at Synchrony, told PYMNTS.

Oscar Health operates on a direct-to-consumer model with an emphasis on user-friendly technology. Its app-based experience offers policyholders a range of digital health services.

The PYMNTS Intelligence report “The Digital Healthcare Gap: Streamlining the Patient Journey” found that two-thirds of consumers use patient portals, particularly millennials and higher-income individuals. Among non-users, 32% expressed interest in using such platforms if available.