What Happened?
Shares of health insurance company Oscar Health (NYSE: OSCR) fell 13.8% in the afternoon session after investors reacted to a proposal to redirect healthcare funding away from insurers and a third-quarter earnings report showing a significant net loss.
The political pressure came after former President Donald Trump called for federal healthcare funding to be sent directly to individuals, a move that would bypass traditional insurance companies. This suggestion raised concerns about the future business model for health insurers like Oscar Health. Adding to the worries, the company's financial performance fell short. Oscar Health reported a third-quarter net loss of $0.53 per share. Its total revenue reached $2.99 billion, but that figure was overshadowed by total expenses, which surpassed revenue at $3.11 billion, highlighting the company's profitability challenges.
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What Is The Market Telling Us
Oscar Health’s shares are extremely volatile and have had 63 moves greater than 5% over the last year. But moves this big are rare even for Oscar Health and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 18 days ago when the stock dropped 7.8% on the news that a rival, Molina Healthcare, slashed its profit forecast, citing rising medical costs and sparking sector-wide concerns. Molina cut its 2025 adjusted profit outlook from a previous target of $19 per share to about $14, attributing the change to "unprecedented" medical claims in its ACA Marketplace plans. The company noted that competitors, including Oscar Health, faced similar cost pressures. This news caused a ripple effect across the industry, with Molina's stock plunge leading declines for other ACA-focused insurers. Oscar's shares fell as investors grew worried about the impact of these elevated costs on the company's own profitability.
Oscar Health is up 12.5% since the beginning of the year, but at $15.26 per share, it is still trading 32.1% below its 52-week high of $22.47 from October 2025. Investors who bought $1,000 worth of Oscar Health’s shares at the IPO in March 2021 would now be looking at an investment worth $438.22.
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