Oscar Health, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

(in thousands, except per share amounts, or as otherwise stated herein)

1. ORGANIZATION

Oscar Health, Inc., together with its subsidiaries (either individually or collectively referred to as “Oscar” or the “Company”), is a leading healthcare technology company whose mission is to make a healthier life accessible and affordable for all. The Company’s Class A common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “OSCR”.

Oscar operates asone reportable segment to sell insurance to individuals, families, and employees through the federal and state-run healthcare exchanges formed in conjunction with the Patient Protection and Affordable Care Act (“ACA”). The Company also wholly owns three businesses operating in the individual market (collectively, the “Marketplace Subsidiaries”): Lucie, Inc. (formerly known as INSXCloud, Inc.), a technology enrollment platform for consumers, employers, and brokers, Trove Group Inc. (formerly known as IHC Specialty Benefits, Inc.), an insurance agency that sells individual medical and supplemental health products, and HealthInsurance.org, LLC, a lead generation website providing educational content to help consumers navigate health insurance as well as the ACA and Medicare marketplaces.

Oscar’s technology drives better choice, deeper engagement, and connection to high-value clinical care for the Company’s members. Oscar serves approximately 3.0 million effectuated members (“members”), as of June 30, 2026. Effectuated members are those who are actively enrolled in one of the Company’s plans and whose required premium payments have either been made or are within the payment grace period. For more information on the recognition of premium related to membership, see“Note 3 - Revenue Recognition”.

Basis of Presentation

The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission for interim financial information. As such, these financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statements.

These Condensed Consolidated Financial Statements are unaudited; however, in the opinion of management, they reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the information presented in conformity with U.S. GAAP applicable for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of results for the full year or future periods. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2025.

Certain monetary amounts, percentages, and other figures included in this Quarterly Report on Form 10-Q have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report on Form 10-Q have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report on Form 10-Q may vary from those obtained by performing the same calculations using the figures in the Company's Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. Certain other amounts that appear in this Quarterly Report on Form 10-Q may not sum due to rounding.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates inherent in the preparation of the accompanying interim Condensed Consolidated Financial Statements include healthcare costs incurred but not yet reported (“IBNR”), and risk adjustment transfers. Estimates are based on past experience, evaluation of current trends, information from third-party professionals, and other considerations that are reasonable under the circumstances. Actual results may differ materially from these estimates.

Reclassification

Certain prior period amounts have been reclassified within the components of total current assets and total current liabilities in the Company’s Condensed Consolidated Balance Sheets, as well as within cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows, to conform to the current period presentation. These reclassifications had no impact on the previously reported totals for current assets, current liabilities, or net cash provided by operating activities.

Allowance for Credit Losses

The Company’s receivables are reported net of any allowance for credit losses. An allowance for credit losses is generally calculated based on historical collection experience, the counterparty's creditworthiness, and consideration of current and future economic events.

As part of value-based care arrangements, the Company entered into risk sharing arrangements with certain of its providers. The intention of these agreements is to align incentives with providers who desire to share accountability for the quality and costs of managing a population of Oscar’s members. If medical expenses exceed agreed upon population-specific target MLR, the provider reimburses the Company an agreed upon portion of the excess expenses creating a risk share receivable due to the Company. The Company recorded risk sharing receivables on a gross basis on the Consolidated Balance Sheet. The Company evaluated expected losses on risk sharing receivables and recorded and adjusted the resulting expected losses to the allowance for credit losses based on the counterparty’s financial health and creditworthiness and any significant changes in the healthcare environment. The Company writes off the receivable balance when it is determined to be uncollectible.

A receivable is recorded for commissions that are due to the Company from brokers related to actual or expected retroactive member disenrollments. The Company evaluated expected losses on broker commission chargeback receivables and recorded the resulting expected losses to the allowance for credit losses based on the counterparty’s financial health and creditworthiness, the Company’s historical collection experience, and consideration of current and future economic events over the life of the receivable. The Company writes off the receivable balance when it is determined to be uncollectible.

The Company has presented the rollforward related to its allowance for credit losses below:

Accounting Pronouncements - Not Yet Adopted

In November 2024, the FASB issued Accounting Standards Update No. 2024-03 (“ASU 2024-03”), Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosures in the Notes to Consolidated Financial Statements, disaggregating specific expense categories for relevant income statement captions and additional disclosures of the Company's total amount of selling expenses. This guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. While the standard will require additional disclosures related to the Company’s income statement, the standard is not expected to have any material impact on the Company’s consolidated operating results, financial condition, or cash flows. The Company is currently evaluating the impact of the adoption of this guidance on the related disclosures.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06 (“ASU 2025-06”), Intangibles–Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the recognition and disclosure framework for internal-use software costs, removing all references to “development stages” and introducing a more judgment-based approach. This guidance is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. This ASU is applicable to the Company’s fiscal year beginning January 1, 2028, with early application permitted. The transition method may be prospective, modified, or retrospective. The Company is currently evaluating the impact of the adoption of this guidance on the Company’s consolidated financial statements and disclosures.

2. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed by dividing Net income (loss) attributable to Oscar Health, Inc. for the period by the weighted-average shares of common stock outstanding during the period.

In periods when the Company is in a net loss position, potentially dilutive securities are excluded from the computation of diluted EPS because their inclusion would have an anti-dilutive effect; thus, basic EPS is the same as diluted EPS.

During periods of net income, diluted EPS is computed by adjusting Net income attributable to Oscar Health, Inc. for any interest charges, net of tax, related to the Company’s convertible notes, and, when applicable, for changes in the fair value of the bifurcated conversion option to the extent these instruments are dilutive. This adjusted net income is then divided by the sum of the basic weighted-average shares of common stock outstanding and any dilutive potential common stock outstanding during the period, using the treasury stock method and the if-converted method for convertible senior notes, as described in“Note 9 - Debt”. Potential common stock includes the effect of outstanding dilutive stock options, restricted stock units, and performance-based restricted stock units. The computations for basic and diluted EPS are as follows:

The following potential common shares were excluded from the computation of diluted EPS because including them would have had an anti-dilutive effect:

3. REVENUE RECOGNITION

Premiums Earned

Premium revenue includes premium subsidies received from the federal government, policy premiums collected directly from members, and assumed policy premiums earned as part of the reinsurance arrangement under the Cigna+Oscar Small Group plan previously offered, net of risk adjustment transfers and ceded premiums from reinsurance contracts accounted for under reinsurance accounting (see“Note 10 - Reinsurance” for additional information on the Company’s reinsurance contracts).

The Company receives a fixed premium per member per month during the period in which it is obligated to provide services to its members based on eligibility criteria provided by the Centers for Medicare & Medicaid Services (“CMS”). Premium is subject to retroactive adjustment based on periodic reconciliation by CMS. Premium revenue reflects premium associated with effectuated members, net of adjustment for premium expected to be refunded to CMS. Premium is expected to be refunded to CMS when a member disenrollment is probable as a result of the non-payment of premium or when a member has been, or it is probable that a member will be, retroactively disenrolled in connection with CMS program integrity requirements and fraud, waste, and abuse laws and regulations.

For the three and six months ended June 30, 2026, premium subsidies earned from CMS represented 90% and 91% of direct policy premiums, respectively. For the three and six months ended June 30, 2025, premium subsidies earned from CMS represented 93% of direct policy premiums.

As of June 30, 2026 and December 31, 2025, amounts payable to CMS for premium subsidies collected and expected to be refunded to CMS were $1.1 billion and $138.1 million, respectively, and are included within Payables to CMS on the Condensed Consolidated Balance Sheets. For information regarding risk adjustment amounts payable to CMS, see“Note 8 – Risk Adjustment”.

Other Revenues

Other revenues primarily include revenue earned through the Company’s Marketplace Subsidiaries, revenue sharing from virtual credit card rebates, and sublease income. Other revenue is recognized in the period the contractual performance obligations are satisfied and measured in an amount that reflects the consideration the Company expects to be entitled to in exchange for performing the services. The timing of the Company's revenue recognition may differ from the timing of payment by customers. A receivable is recorded to Accounts receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, deferred revenue is recorded to Accounts payable and other liabilities when payment is received before the performance obligations are satisfied.

4. INVESTMENTS

Net investment income was attributable to the following:

As of June 30, 2026 and December 31, 2025, the Company recorded accrued investment income of $46.6 million and $20.2 million, respectively.

The following tables provide summaries of the Company's carrying amounts and fair values of available-for-sale securities by major security type as of June 30, 2026 and December 31, 2025:

(1) Includes equity securities without a readily determinable market value.

(1) Includes equity securities without a readily determinable market value.

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position, by the length of time in which the securities have continuously been in that position, as of June 30, 2026 and December 31, 2025:

The Company monitors available-for-sale debt securities for credit losses and recognizes an allowance for credit losses when factors indicate a decline in the fair value of a security is credit-related. Certain investments may experience a decline in fair value due to changes in market interest rates, changes in general economic conditions, or a deterioration in the credit worthiness of a security's issuer. For securities in an unrealized loss position that the Company does not intend to sell, the Company has assessed the gross unrealized losses during the period and determined an allowance for credit losses is not necessary because the declines in fair value are believed to be due to market fluctuations and not due to credit-related events.

The amortized cost and fair value of the Company's fixed maturity securities as of June 30, 2026 and December 31, 2025 by contractual maturity are shown below. Actual maturities of these securities could differ from their contractual maturities because issuers may have the right to call or prepay obligations, with or without penalties.

5. FAIR VALUE MEASUREMENTS

Fair value represents the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The Company's financial assets and liabilities measured at fair value on a recurring basis are categorized into a three-level fair value hierarchy based on the priority of the inputs used in the fair value valuation technique.

The levels of the fair value hierarchy are as follows:

•Level 1: Inputs utilize quoted (unadjusted) prices in active markets for identical assets or liabilities.

•Level 2: Inputs utilize quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations in which all significant inputs are observable in active markets.

•Level 3: Inputs utilized are unobservable but significant to the fair value measurement for the asset or liability. The unobservable inputs are used to measure fair value to the extent relevant observable inputs are not available. The unobservable inputs typically reflect management’s own estimates about the assumptions a market participant would use in pricing the asset or liability.

The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis:

6. RESTRICTED CASH AND RESTRICTED DEPOSITS

The Company maintains cash, cash equivalents, and investments on deposit that are pledged to various state agencies in connection with its insurance licensure or property leases. The restricted cash and cash equivalents and restricted investments presented below are included in Restricted deposits in the accompanying Condensed Consolidated Balance Sheets.

7. BENEFITS PAYABLE

Reserves for medical claims expenses are estimated using actuarial assumptions and recorded as Benefits payable liabilities on the Condensed Consolidated Balance Sheets. The assumptions for the estimates and for establishing the resulting liability are reviewed and any adjustments to reserves are reflected in the Condensed Consolidated Statements of Operations in the period in which the estimates are updated.

The following table provides a rollforward of the Company’s beginning and ending benefits payable and claims adjustment expenses (“CAE”) payable balances for the six months ended June 30, 2026 and 2025:

Amounts incurred related to prior periods vary from previously estimated liabilities as more claim information becomes available and claims are ultimately settled. The favorable prior period development recognized in the six months ended June 30, 2026 resulted primarily from lower than expected paid claims for 2025.

8. RISK ADJUSTMENT

The risk adjustment programs in the markets the Company serves are administered federally by CMS and are designed to mitigate the potential impact of adverse selection and provide stability for health insurers. Under these programs, each plan is assigned a risk score based upon demographic information and current year claims information related to its members. Plans with lower than average risk scores generally pay into the pool (included within Payables to CMS on the Condensed Consolidated Balance Sheets), while plans with higher than average risk scores generally receive distributions (included within Receivables from CMS on the Condensed Consolidated Balance Sheets). The Company estimates its risk adjustment transfer receivable or payable for each state by comparing its estimated risk score to the state average risk score. Changes in the Company's membership throughout the year, including the impact of member disenrollments, may affect the Company's estimate of its risk adjustment transfer receivable or payable. The Company records a receivable or payable as an adjustment to its premium revenues to reflect the year-to-date impact of the risk adjustment based on its best estimate. The Company reevaluates its risk adjustment transfer estimates as new information and market data becomes available until final reporting is received from CMS in later periods, which may be up to twelve months in arrears.

The following table provides a rollforward of the Company’s beginning and ending risk adjustment receivable and payable balances for the six months ended June 30, 2026 and 2025:

(1)The table includes risk adjustment data validation (“RADV”) receivables and payables. The balance at the beginning of each year presented pertains to prior policy years.

(2)Includes immaterial payments for prior policy years.

The six months ended June 30, 2026, reflected higher net risk adjustment payables compared to the six months ended June 30, 2025, primarily due to higher membership, as well as higher net risk adjustment payables per member.

9. DEBT

2031 Convertible Senior Notes

In February 2022, the Company issued $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC, and Tenere Capital LLC (the “Initial Purchasers”). In connection with the issuance of the 2031 Notes, on January 27, 2022, the Company entered into an investment agreement with the Initial Purchasers (the “Investment Agreement”) and on February 3, 2022, the Company entered into an indenture with U.S. Bank, as Trustee (the “2031 Indenture”).

On September 11, 2025, the Company entered into an amendment to the Investment Agreement to permit the private offering of the 2030 Notes (as defined below) under the Investment Agreement (the “Amendment”). The Amendment provided, in relevant part, that the issuance of the 2030 Notes would be permitted provided that the 2030 Notes were and remained expressly subordinated in right of payment to the 2031 Notes for as long as Oasis FD Holdings, LP (“Dragoneer”) held at least $75.0 million in aggregate principal amount of the 2031 Notes. As discussed further below, in connection with the Exchange Agreement and the related transactions, as of November 5, 2025, the debt covenants in the Investment Agreement, as amended, were extinguished, and the 2030 Notes ceased to be subordinated to the 2031 Notes.

The 2031 Notes bear interest at a rate of 7.25% per annum, payable in cash, semi-annually in arrears on June 30 and December 31 of each year, beginning on June 30, 2022. The 2031 Notes will mature on December 31, 2031, unless they are earlier repurchased, redeemed, or converted, as further discussed in “Note 9 - Debt,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

The 2031 Notes are initially convertible into the Company's Class A common stock at a price of approximately $8.32 per share of Class A common stock (based on an initial conversion rate of 120.1721 shares per $1,000 principal amount), subject to customary adjustments upon the occurrence of certain events. The holders may elect to convert their 2031 Notes if certain conditions are met, as further discussed in “Note 9 - Debt,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, including upon the satisfaction of a Class A common stock sale price condition. During the quarterly period ended June 30, 2026, the Class A common stock sales price condition was satisfied because the last reported sales price per share of the Company’s Class A common stock exceeded 130% of the conversion price of $8.32 per share for at least twenty (20) trading days of the thirty (30) consecutive trading days ending on the last trading day of the quarter. As a result, the holders may elect to convert their 2031 Notes during the third quarter of 2026.

As of June 30, 2026, $35 million aggregate principal amount of the 2031 Notes remained outstanding.

2030 Convertible Senior Notes

On September 18, 2025, the Company issued $410.0 million aggregate principal amount of convertible senior notes due 2030 (the “2030 Notes”). The 2030 Notes were issued pursuant to an indenture (the “2030 Indenture”), dated as of September 18, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee.

The 2030 Notes bear interest at a rate of 2.25% per annum, payable in cash, semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2026. The 2030 Notes will mature on September 1, 2030, unless they are earlier repurchased, redeemed, or converted, as further discussed in “Note 9 - Debt,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

The 2030 Notes are initially convertible into the Company's Class A common stock at a price of approximately $24.82 per share of Class A common stock (based on an initial conversion rate of 40.2946 shares per $1,000 principal amount), subject to customary adjustments upon the occurrence of certain events. The holders may elect to convert their 2030 Notes if certain conditions are met, as further discussed in “Note 9 - Debt,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, including upon the satisfaction of a Class A common stock sale price condition. During the quarterly period ended June 30, 2026, the Class A common stock sales price condition was not satisfied because the last reported sales price per share of the Company’s Class A common stock did not exceed 130% of the conversion price of $24.82 per share for at least twenty (20) trading days of the thirty (30) consecutive trading days ending on the last trading day of the quarter. As a result, the holders may not elect to convert their 2030 Notes during the third quarter of 2026.

As discussed above under “2031 Convertible Senior Notes”, the 2030 Notes were originally subordinated to the 2031 Notes. In connection with the Exchange Agreement and the related transactions, as of November 5, 2025, the 2030 Notes ceased to be subordinated to the 2031 Notes.

As of June 30, 2026, $410 million aggregate principal amount of the 2030 Notes remained outstanding.

The following is a summary of net carrying amounts and the estimated fair values of the Company’s convertible notes:

The following table presents the interest expense over the term of the Company’s convertible notes:

Capped Call Transactions

On September 15, 2025, in connection with the pricing of the offering of 2030 Notes, the Company entered into privately negotiated capped call transactions (the “Base Capped Call Transactions”) with certain of the 2030 Notes initial purchasers or their affiliates and certain other financial institutions (the “Option Counterparties”). In addition, on September 16, 2025, in connection with the initial purchasers’ exercise of their option to purchase additional 2030 Notes, the Company entered into additional capped call transactions (the “Additional Capped Call Transactions,” and, together with the Base Capped Call Transactions, the “Capped Call Transactions”) with each of the Option Counterparties. The cost of the Capped Call Transactions was approximately $34.4 million. For more information, see “Note 9 - Debt,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Revolving Credit Facility

On February 6, 2026, Oscar Health, Inc. entered into a $475.0 million secured three-year revolving credit facility (the “Revolving Credit Facility”), pursuant to a Credit Agreement (the “2026 Credit Agreement”) by and among the Company, certain subsidiaries of the Company, as subsidiary guarantors, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto. The facility is set to expire on February 6, 2029, and includes the ability for the Company to increase commitments up to an additional $100.0 million, subject to customary closing conditions. Proceeds will be used for general corporate purposes. Borrowings will initially bear interest, at the Company’s option, at either the Term Secured Overnight Financing Rate (“SOFR”) plus 4.50% per annum or the Alternate Base Rate plus 3.50% per annum. Starting June 30, 2026, each of the commitment fee (initially 0.50% for available but undrawn amounts) and applicable interest rate margin will be adjusted based on the Company’s Total Net Leverage Ratio. The 2026 Credit Agreement contains customary conditions precedent, representations and warranties, affirmative and negative covenants, events of default and indemnities. In addition, the Revolving Credit Facility requires compliance with certain financial covenants. As of June 30, 2026, no borrowings were outstanding under the Revolving Credit Facility.

10. REINSURANCE

The Company participates in quota share reinsurance to limit risk and capital requirements and XOL reinsurance to mitigate the exposure of high cost or catastrophic member risk. The quota share reinsurance arrangements are with more than one counterparty with multiple state-level treaties. The XOL reinsurance arrangements are with a private counterparty and federal and state-run programs. A summary of the Company's reinsurance agreements and related accounting treatment is included in“Note 11 - Reinsurance,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

As previously disclosed in“Note 1 - Organization,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, the Company did not renew the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024, and will continue to provide transition and run-off services through December 31, 2026, and share proportionally in all premiums and claims for any Cigna+Oscar Small Group plan sold or issued on or before December 15, 2024, in accordance with the terms of the arrangement.

Reinsurance Contracts Accounted for under Deposit Accounting

Reinsurance contracts that do not meet risk transfer requirements are accounted for under the deposit accounting method. Under deposit accounting, the contract is recorded as a financing transaction, with no impact to premium revenues or medical expenses. The premiums earned and claims incurred that would have otherwise been ceded under reinsurance accounting are recorded on a net basis on the Consolidated Balance Sheets as a deposit liability within Accounts payable and other liabilities. As of June 30, 2026 and December 31, 2025, a deposit liability balance of $83.6 million and $140.5 million, respectively, was recorded for the Company's quota share arrangements accounted for under deposit accounting. For the three and six months ended June 30, 2026, the deposit accounting impact, net of ceding commission, was $21.1 million and $43.0 million, respectively. For the three and six months ended June 30, 2025, the deposit accounting impact, net of ceding commission, was $11.5 million and $22.8 million, respectively. These amounts were recognized within Selling, general, and administrative expenses on the Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2026 and 2025, the Company ceded approximately 49% of its premiums under reinsurance contracts accounted for under deposit accounting.

Reinsurance Contracts Accounted for under Reinsurance Accounting

The Company applies reinsurance accounting primarily to XOL treaties. The tables below present information for the Company's reinsurance arrangements accounted for under reinsurance accounting. Please see“Note 3 - Revenue Recognition” for total reinsurance premiums ceded and reinsurance premiums assumed, which are included as components of total Premium revenue in the Condensed Consolidated Statements of Operations.

The following table reconciles total Medical expenses to the amount presented in the Condensed Consolidated Statements of Operations:

The composition of the Reinsurance recoverable balance on the Consolidated Balance Sheets is as follows:

Credit Ratings

The financial condition of the Company's reinsurers is regularly evaluated to minimize exposure to significant losses. A key credit quality indicator for reinsurance is the financial strength ratings issued by the credit rating agencies, which provide an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. The Company’s reinsurers have most recently been issued financial strength ratings of A+ or higher.

The creditworthiness of each reinsurer is evaluated in order to assess counterparty credit risk and estimate an allowance for expected credit losses on the Company's reinsurance recoverable balances.

11. RELATED PARTY TRANSACTIONS

In February 2022, the Company issued the 2031 Notes to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital Management, LLC, LionTree Investment Management, LLC and Tenere Capital LLC (collectively, the “Purchasers”). See“Note 9 - Debt” for additional information. On November 3, 2025, the Company and Dragoneer entered into an Exchange Agreement (the “Exchange Agreement”), allowing Dragoneer to exchange up to $250.0 million of 2031 Notes for Class A common stock and up to $17.8 million in cash and/or stock. In November 2025, Dragoneer exchanged all $250.0 million of its 2031 Notes for approximately 30.1 million shares of Class A common stock and an inducement payment of approximately $17.8 million ($4.4 million in cash and $13.3 million settled through the issuance of approximately 0.7 million additional shares of Class A common stock). In connection with the Exchange Agreement and the related transactions, as of November 5, 2025, the debt covenants in the Investment Agreement were extinguished, and the 2030 Notes ceased to be subordinated to the 2031 Notes.

On April 3, 2026 (the “Purchase Date”), the Company entered into a Stock Purchase Agreement with Mark T. Bertolini, the Company’s Chief Executive Officer, pursuant to which the Company sold an aggregate of 1,000,000 shares of the Company’s Class A common stock (the “Shares”) to Mr. Bertolini for an aggregate purchase price of $11.9 million, at a price per share of $11.92, representing the per share closing price of the Company’s Class A common stock as reported by the NYSE on the trading date immediately preceding the Purchase Date. No underwriting discounts or commissions were paid in connection with the transaction. The Shares were offered and sold in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction not involving a public offering.

12. COMMITMENTS AND CONTINGENCIES

The Company’s current and past business practices are subject to reviews or other investigations by various state insurance and healthcare regulatory authorities and other state and federal regulatory authorities. These reviews focus on numerous facets of the Company’s business, including claims payment practices, statutory capital requirements, provider contracting, risk adjustment, competitive practices, commission payments, privacy issues, fraud, waste and abuse laws, network adequacy, utilization management practices, pharmacy benefits, access to care, compliance with Health Insurance Marketplace or enhanced direct enrollment (“EDE”) agreements and sales practices, among others. Some of these reviews have historically resulted in fines imposed on the Company and some have required changes to certain of the Company’s practices. The Company continues to be subject to these reviews, which could result in additional fines or other sanctions being imposed on the Company or additional changes to certain of its practices.

The Company is also currently involved in, and may in the future from time to time become involved in, legal proceedings and other claims in the ordinary course of its business, including class actions and suits brought by the Company’s members, providers, commercial counterparties, employees, and other parties relating to the Company’s business, including management and administration of health benefit plans and other services. Such matters can include claims relating to the performance of contractual and non-contractual obligations to providers, vendors, members, employer groups, and others, including, but not limited to, the alleged failure to properly pay in-network and out-of-network claims and challenges to the manner in which the Company processes claims, claims alleging that the Company has engaged in unfair business practices, claims that the Company has violated laws or regulations, disputes regarding the amounts owed under vendor contracts, various employment claims, disputes regarding reinsurance arrangements, disputes relating to intellectual property, privacy, the Telephone Consumer Protection Act and class action lawsuits, or other claims alleging that the Company has engaged in unfair business practices.

The Company records liabilities for its reasonable estimates of probable losses resulting from these matters where appropriate. Estimates of losses resulting from legal and regulatory matters involving the Company are inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; or could result in a change in business practices. Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable that a loss may be incurred, the ultimate settlement of which could be material.

Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on Oscar's business, results of operations, financial condition or cash flows.

The ACA originally established a cost-sharing reduction (“CSR”) program to make health insurance more affordable for eligible individuals by requiring insurers to reduce out-of-pocket costs while receiving CSR subsidies from CMS. In 2017, the Trump Administration issued an executive order that immediately ceased payments of ACA CSR subsidies to issuers. On June 27, 2017, impacted issuers seeking compensation for the halted CSR subsidy payments commenced a class action lawsuit against the federal government in the Court of Federal Claims, captioned Common Ground Healthcare Cooperative v. United States, Case No. 17-877. In 2024, an agreement in principle was reached between class counsel on behalf of impacted issuers and the federal government to retroactively compensate the class. The settlement agreement was fully executed by the class and the federal government on August 11, 2025. On November 6, 2025, the Court of Federal Claims granted final settlement approval and ordered the distribution of 95% of the settlement funds, with the remaining 5% held until the attorneys’ fees award is determined. The estimated net recovery recorded as of December 31, 2025 was approximately $48 million, which was subsequently received in April 2026.

13. SEGMENT INFORMATION

The Company operates in and reports as a single reportable segment. The Company determined that the Chief Executive Officer is the chief operating decision maker (“CODM”) who regularly reviews financial information and other key performance indicators on a consolidated basis, for the purposes of allocating resources and evaluating financial performance. Factors used in determining the reportable segment include the nature of operating activities, the Company’s organizational and reporting structure, and the type of information presented to the Company’s CODM to allocate resources and evaluate financial performance. The accounting policies of the segment are the same as those described in “Note 2 - Summary of Significant Accounting Policies,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The CODM reviews Net income (loss) attributable to Oscar Health, Inc. and Earnings (loss) from operations presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. These metrics serve as benchmarks to evaluate the business, measure performance, identify trends, prepare financial projections, and make strategic decisions. The CODM does not evaluate performance or allocate resources based on assets data.

The following table presents the revenue, significant expenses, and net income (loss) for the Company’s segment. As the Company operates and reports as a single segment, its measure of segment net income (loss) is the same as Net income (loss) attributable to Oscar Health, Inc. on the Condensed Consolidated Statements of Operations.

(1)Member acquisition and servicing costs include the Company’s expenses incurred to acquire, service, and fulfill obligations to members.

(2)Premium taxes, exchange fees, and other taxes and fees represent non-income tax charges from federal and state governments, including but not limited to healthcare exchange user fees and premium taxes.

(3)All other SG&A includes employee-related and administrative costs that are not member-based. Additionally, all other SG&A includes the net impact of quota share reinsurance accounted for under deposit accounting.

Significant Customers

The Company generates the majority of its total revenue from health insurance policy premiums, which primarily come from subsidies received from CMS as part of the Advanced Premium Tax Credit program.