Oscar Health (OSCR) FY2025 10-K Risk Factors: 5 New, 7 Dropped

What the changes say

Oscar Health's risk profile centers heavily on regulatory and legislative uncertainties affecting ACA plans, including program integrity rules and premium tax credits.
The company also highlights risks from its acquisition of IHC Specialty Benefits, potential tariff impacts, and debt conversion terms.

What changed since the prior 10-K

New

New
The Program Integrity Rules, as well as the OBBBA, could have a material impact on the Health Insurance Marketplaces and could also have a material impact on our membership, business, revenue, operating results, and financial condition
Program Integrity Rules, the OBBBA, and potential eAPTC extensions or expirations create operational disruptions and enrollment shifts for our Health Insurance Marketplaces.
NewRisks Related to the Regulatory Framework that Governs Us
Furthermore, we may face challenges prioritizing the allocation of resources between implementing systems responsive to new legislative or regulatory requirements and focusing on growth-related operations
Allocating resources between new regulatory compliance and growth operations creates challenges, alongside risks from handling personal and medical data.
NewRisks Related to the Regulatory Framework that Governs Us
Changes in laws, regulations or rules relating to taxes or tariffs could adversely affect us
The OBBBA's tax provisions and potential tariffs on imported pharmaceuticals and medical devices could adversely affect our business and cash flows.
NewRisks Related to our Business
Our acquisition and ownership of a health insurance agency and an enhanced direct enrollment platform exposes us to risks that could adversely affect our business, financial condition, results of operations, and cash flows
Acquiring IHC Specialty Benefits exposes us to agency-specific operational, regulatory, and financial risks, including reliance on carrier commission payments.
NewRisks Related to our Indebtedness
We may be unable to raise the funds necessary to repurchase our outstanding Notes for cash following a fundamental change or on the optional repurchase dates, or to pay any cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase the Notes or pay cash upon their conversion
We may lack sufficient cash or financing to repurchase our outstanding Notes or pay cash conversion amounts upon a fundamental change.

Dropped

Dropped
impact our financial condition or require a change in our operating strategies. As a result of these factors, entering new markets or introducing new health plans may decrease our profitability
DroppedRisks Related to the Regulatory Framework that Governs Us
We operate in a highly regulated industry and we must comply with numerous and complex state and federal laws and regulations to operate our business, including requirements to maintain or renew our regulatory approvals or obtain new regulatory approvals to sell insurance and to sell specific health plans
DroppedRisks Related to the Regulatory Framework that Governs Us
Changes to government policies (including those not specifically targeted to the healthcare industry), such as a change in tax laws and the corporate tax rate, premium tax rate, or government spending cuts, could have significant impacts on our business, results of operations, financial condition and liquidity
Risks of entering new markets or introducing new health plans decreasing profitability.
DroppedRisks Related to the Regulatory Framework that Governs Us
knew, or it is determined that we should have known, that information we provided to form the basis for a claim for government payment was false or fraudulent, or that we were out of compliance with program requirements considered material to the government’s payment decision
DroppedRisks Related to the Regulatory Framework that Governs Us
Health insurers are required to maintain compliance programs to prevent, detect and remediate fraud, waste, and abuse, and are often the subject of fraud, waste, and abuse investigations and audits
DroppedRisks Related to our Business
number of highly-specialized insurance experts, the loss of any one of whom could also have a disproportionate impact on our business. We face significant competition for personnel across all areas of our business, and we may not be able to replace key personnel in a timely manner or at all
DroppedRisks Related to Ownership of Our Class A Common Stock
The obligations associated with being a public company require significant resources and management attention
NAIC Model Audit Rule compliance and related corporate governance requirements.

Reworded

89% rewrittenRisks Related to the Regulatory Framework that Governs Us
We are subject to extensive fraud, waste, and abuse laws that may require us to take remedial measures or give rise to lawsuits, audits, investigations and claims against us, the outcome of which may have a material adverse effect on our business, financial condition, cash flows, or results of operations
Retained the core fraud, waste, and abuse risk disclosure with minor stylistic formatting changes.
79% rewritten
Our strategy includes, without limitation, acquiring new members, retaining existing members, introducing new products and plans, expanding into new markets and lines of business, and monetizing our technology through our +Oscar platform
Updated to explicitly reference our +Oscar platform as part of our strategy to monetize technology.
Was: Our strategy includes, without limitation, acquiring new members and retaining existing members, introducing new products and plans, expanding into new markets and lines of business, and monetizing our technology through our +Oscar platform
75% rewrittenRisks Related to Ownership of Our Class A Common Stock
We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock
Added specific language stating that potential preferred stock issuances may delay or prevent a change in control and depress Class A stock prices.
74% rewritten
Any changes to the ACA and its regulations could materially and adversely affect our business, results of operations, and financial condition
Updated ACA revenue dependency to 98% for recent periods and added risks regarding judicial opinions and appointed official proposals.
69% rewritten
Failure to accurately estimate our incurred medical expenses or overall market morbidity, or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows
Added explicit references to estimating future market morbidity and risk adjustment transfers, noting risks from incomplete underlying data.
Was: Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows
68% rewrittenRisks Related to Ownership of Our Class A Common Stock
We are a “controlled company” within the meaning of the rules of NYSE and, as a result, we may rely on exemptions from certain corporate governance requirements and, if we chose to do so, you will not have the same protections afforded to stockholders of companies that are not exempt from such requirements
Retained controlled company risk disclosures under NYSE rules without substantive textual changes.
65% rewritten
The result of risk adjustment programs may impact our revenue, add operational complexity, and introduce additional uncertainties that may have a material adverse effect on our results of operations, financial condition, and cash flows
Clarified that risk adjustment program estimates rely on data received from independent third parties.
Was: The result of risk adjustment programs may impact our revenue, add operational complexity, and introduce additional uncertainties that have a material adverse effect on our results of operations, financial condition, and cash flows
61% rewrittenRisks Related to our Business
We rely on the experience and expertise of our Chief Executive Officer, Co-Founders, senior management team, highly-specialized technology and insurance experts, key technical employees, and other highly skilled personnel
Added defined terms for Co-Founders Mario Schlosser and Joshua Kushner alongside CEO Mark T. Bertolini.
59% rewrittenRisks Related to our Indebtedness
Our debt obligations contain restrictions that impact our business and expose us to risks that could materially adversely affect our liquidity and financial condition
56% rewrittenRisks Related to our Indebtedness
Restrictions imposed by our 2026 Revolving Credit Facility may materially limit our ability to operate our business and finance our future operations or capital needs
Was: Restrictions imposed by our Revolving Credit Facility may materially limit our ability to operate our business and finance our future operations or capital needs
52% rewritten
We have a history of losses, and we may not achieve or maintain profitability in the future
Was: We have a history of losses, and we may not maintain profitability in the future
46% rewrittenRisks Related to our Business
We need liquidity to pay our operating expenses, make payments on our indebtedness, if any, and pay capital expenditures. The principal sources of our cash receipts are premiums, administrative fees, investment income, proceeds from borrowings and proceeds from the issuance of capital stock
42% rewrittenRisks Related to our Indebtedness
Provisions in the 2026 Revolving Credit Facility or the indentures governing the Notes could delay or prevent an otherwise beneficial takeover of us
Was: Provisions in the Revolving Credit Facility or the Indenture governing the 2031 Notes could delay or prevent an otherwise beneficial takeover of us
41% rewrittenRisks Related to our Business
We may face risks associated with our utilization of certain AI and machine learning models
Was: We may face risks associated with our utilization of certain artificial intelligence and machine learning models
34% rewrittenRisks Related to our Business
We are a public reporting company subject to the rules and regulations established by the SEC and the New York Stock Exchange (“NYSE”). These rules and regulations require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial reporting
31% rewrittenRisks Related to our Business
We may not be able to utilize our net operating loss carryforwards (“NOLs”), to offset future taxable income for U.S. federal and state income tax purposes, which could adversely affect our cash flows
29% rewrittenRisks Related to Ownership of Our Class A Common Stock
If our operating and financial performance in any given period does not meet the guidance that we provide to the public, the market price of our Class A common stock may decline
29% rewrittenRisks Related to our Business
Failure to secure, protect, or enforce our intellectual property rights could harm our business, results of operations, and financial condition
27% rewrittenRisks Related to our Business
Our limited operating history in an evolving industry makes it difficult to evaluate our current business performance, implementation of our business model, and our future prospects
20% rewrittenRisks Related to our Business
If state regulators do not approve payments of dividends and distributions by our Health Insurance Subsidiaries to us, or do not approve other capital efficiency structures we may pursue, we may not have sufficient funds to implement our business strategy

All 41 risk factors

Headings as the filing states them, in filing order.

Other

01Our business, financial condition, and results of operations may be harmed if we fail to execute our strategy and manage our growth effectively
02Our strategy includes, without limitation, acquiring new members, retaining existing members, introducing new products and plans, expanding into new markets and lines of business, and monetizing our technology through our +Oscar platform79% rewritten
03The Program Integrity Rules, as well as the OBBBA, could have a material impact on the Health Insurance Marketplaces and could also have a material impact on our membership, business, revenue, operating results, and financial conditionNew
04Failure to accurately estimate our incurred medical expenses or overall market morbidity, or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows69% rewritten
05The result of risk adjustment programs may impact our revenue, add operational complexity, and introduce additional uncertainties that may have a material adverse effect on our results of operations, financial condition, and cash flows65% rewritten
06Any changes to the ACA and its regulations could materially and adversely affect our business, results of operations, and financial condition74% rewritten
07We have a history of losses, and we may not achieve or maintain profitability in the future52% rewritten

Risks Related to the Regulatory Framework that Governs Us

08Changes or developments in the regulation of health insurance markets in the United States, including passage and implementation of a law to create a single-payer or government-run health insurance program, could materially and adversely harm our business and operating results
09Furthermore, we may face challenges prioritizing the allocation of resources between implementing systems responsive to new legislative or regulatory requirements and focusing on growth-related operationsNew
10We are subject to extensive fraud, waste, and abuse laws that may require us to take remedial measures or give rise to lawsuits, audits, investigations and claims against us, the outcome of which may have a material adverse effect on our business, financial condition, cash flows, or results of operations89% rewritten
11Changes in laws, regulations or rules relating to taxes or tariffs could adversely affect usNew

Risks Related to our Business

12If state regulators do not approve payments of dividends and distributions by our Health Insurance Subsidiaries to us, or do not approve other capital efficiency structures we may pursue, we may not have sufficient funds to implement our business strategy20% rewritten
13We need liquidity to pay our operating expenses, make payments on our indebtedness, if any, and pay capital expenditures. The principal sources of our cash receipts are premiums, administrative fees, investment income, proceeds from borrowings and proceeds from the issuance of capital stock46% rewritten
14From time to time, we may become involved in costly and time-consuming litigation and regulatory audits and actions, which require significant attention from our management
15We are subject to risks associated with our geographic concentration
16We are subject to risks associated with outsourcing services and functions to third parties
17We rely on the experience and expertise of our Chief Executive Officer, Co-Founders, senior management team, highly-specialized technology and insurance experts, key technical employees, and other highly skilled personnel61% rewritten
18If we are unable to integrate and manage our information systems effectively, our operations could be disrupted
19Real or perceived errors, failures, vulnerabilities, or bugs in our systems, website, or app could impair our operations, damage our reputation and brand, and harm our business and operating results
20We may face risks associated with our utilization of certain AI and machine learning models41% rewritten
21We are subject to risks associated with public health crises arising from large-scale medical emergencies, pandemics, natural disasters and other extreme events, which have had, and could in the future have, an adverse effect on our business, results of operations, financial condition and financial performance
22We may not be able to utilize our net operating loss carryforwards (“NOLs”), to offset future taxable income for U.S. federal and state income tax purposes, which could adversely affect our cash flows31% rewritten
23Our limited operating history in an evolving industry makes it difficult to evaluate our current business performance, implementation of our business model, and our future prospects27% rewritten
24We are a public reporting company subject to the rules and regulations established by the SEC and the New York Stock Exchange (“NYSE”). These rules and regulations require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial reporting34% rewritten
25Significant delays in our receipt of direct policy premiums, including as a result of regulatory restrictions on policy cancellations and non-renewals, could have a material adverse effect on our business, operations, cash flows, or earnings
26We make virtual healthcare services available to our members through Oscar Medical Group, in which we do not own any equity or voting interest, and our virtual care availability may be disrupted if our arrangements with providers like the Oscar Medical Group become subject to legal challenges
27Failure to secure, protect, or enforce our intellectual property rights could harm our business, results of operations, and financial condition29% rewritten
28We may be subject to claims by others that we are infringing on their intellectual property rights
29Increasing scrutiny and differing expectations with respect to sustainability and environmental, social and governance (“ESG”) matters may impose additional costs on us, impact our access to capital, or expose us to new or additional risks
30Our acquisition and ownership of a health insurance agency and an enhanced direct enrollment platform exposes us to risks that could adversely affect our business, financial condition, results of operations, and cash flowsNew

Risks Related to our Indebtedness

31Restrictions imposed by our 2026 Revolving Credit Facility may materially limit our ability to operate our business and finance our future operations or capital needs56% rewritten
32Our debt obligations contain restrictions that impact our business and expose us to risks that could materially adversely affect our liquidity and financial condition59% rewritten
33We may be unable to raise the funds necessary to repurchase our outstanding Notes for cash following a fundamental change or on the optional repurchase dates, or to pay any cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase the Notes or pay cash upon their conversionNew
34Provisions in the 2026 Revolving Credit Facility or the indentures governing the Notes could delay or prevent an otherwise beneficial takeover of us42% rewritten

Risks Related to Ownership of Our Class A Common Stock

35Because Thrive Capital and our Co-Founders’ interests may differ from those of our other stockholders, actions that Thrive Capital and our Co-Founders take with respect to us, as significant stockholders, may not be favorable to our other stockholders, including holders of our Class A common stock
36We cannot predict the effect our dual class structure may have on the market price of our Class A common stock
37We are a “controlled company” within the meaning of the rules of NYSE and, as a result, we may rely on exemptions from certain corporate governance requirements and, if we chose to do so, you will not have the same protections afforded to stockholders of companies that are not exempt from such requirements68% rewritten
38We do not intend to pay dividends on our Class A common stock for the foreseeable future
39We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock75% rewritten
40Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of the Company more difficult, limit attempts by our stockholders to replace or remove our current management, and depress the market price of our Class A common stock
41If our operating and financial performance in any given period does not meet the guidance that we provide to the public, the market price of our Class A common stock may decline29% rewritten

Other Oscar Health 10-Ks

FY2024 10-K risk factors
43 risks
Oscar Health achieved its first-ever profitability in 2024, reporting $26.1 million in net income and $199.2 million in Adjusted EBITDA, alongside an accumulated deficit of $2.85 billion.
Filed Feb 20, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.