Oscar Health, Inc.

Previous wording

Our technology drives better choice, deeper engagement, and connection to high-value clinical care for our members. We serve approximately 3.0 million effectuated members (“members”) as of June 30, 2026, which represents an approximately 46% increase compared to June 30, 2025. 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. Refer to“Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations-Recent Developments, Trends and Other Key Factors Impacting Performance-Members”and “Note 3 - Revenue Recognition” for further discussion.

Current wording

Our technology drives better choice, deeper engagement, and connection to high-value clinical care for our members. We serve approximately 2.7 million effectuated members (“members”) as of September 30, 2026, which represents an approximately 27% increase compared to September 30, 2025. 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. Refer to“Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations-Recent Developments, Trends and Other Key Factors Impacting Performance-Members”and “Note 3 - Revenue Recognition” for further discussion.

Previous wording

•In connection with CMS’ ongoing focus on the integrity of the Health Insurance Marketplaces, CMS conducts periodic inquiries to verify member eligibility and ensure compliance with applicable program integrity and fraud, waste, and abuse laws and regulations. These inquiries may result in the removal of members by CMS. The Company’s estimate of premium associated with these inquiries and expected to be refunded to CMS is included in Payables to CMS on the Condensed Consolidated Balance Sheets, as further described in“Note 3 - Revenue Recognition”.

Current wording

•In connection with CMS’ ongoing focus on the integrity of the Health Insurance Marketplaces, CMS conducts periodic inquiries to verify member eligibility and ensure compliance with applicable program integrity and fraud, waste, and abuse laws and regulations. These inquiries have resulted, and may in the future result, in the removal of members by CMS. The Company’s estimate of premium associated with these inquiries and expected to be refunded to CMS is included in payables to CMS on the Condensed Consolidated Balance Sheets, as further described in“Note 3 - Revenue Recognition”.

Previous wording

•We believe that the expiration of the eAPTCs, and the implementation of any program integrity requirements (such as the Program Integrity Rules, the 2027 NBPP, and the OBBBA) and any related regulatory inquiries could continue to negatively impact the size of the Health Insurance Marketplaces and our membership in future years. Any resulting market contraction could negatively impact market morbidity. For more information, see Part I, Item 1, “Business– Government Regulation–Ongoing Requirements and Changes to the ACA”, and Part I, Item 1A. “Risk Factors-Most Material Risks to Us-Our success and ability to grow our business depend in part on retaining and expanding our member base. If we fail to add new members or retain current members, or manage our membership growth appropriately to meet our business objectives, our business, revenue, operating results, and financial condition could be harmed,” and“Risk Factors–Most Material Risks to Us–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” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

•We believe that the expiration of the eAPTCs, and the implementation of any program integrity requirements (such as the Program Integrity Rules, the 2027 NBPP, the ID Proofing rules, and the OBBBA) and any related regulatory inquiries could continue to negatively impact the size of the Health Insurance Marketplaces and our membership in future years. Any resulting market contraction could negatively impact market morbidity. For more information, see Part I, Item 1, “Business– Government Regulation–Ongoing Requirements and Changes to the ACA”, and Part I, Item 1A. “Risk Factors-Most Material Risks to Us-Our success and ability to grow our business depend in part on retaining and expanding our member base. If we fail to add new members or retain current members, or manage our membership growth appropriately to meet our business objectives, our business, revenue, operating results, and financial condition could be harmed,” and“Risk Factors–Most Material Risks to Us–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” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

The Trump administration has indicated that new tariffs may be imposed on a variety of products relevant to our business, including certain pharmaceutical products and ingredients and medical devices and supplies imported into the United States. For example, on April 2, 2026, the Trump administration issued a proclamation under Section 232 of the Trade Expansion Act imposing 100% tariffs on patented pharmaceuticals and associated pharmaceutical ingredients, imported into the United States, which took effect on July 31, 2026 for certain enumerated companies, and take effect on September 29, 2026 for all other companies, unless manufacturers agree to specific government drug pricing deals or commit to shifting production and research and development of patented pharmaceuticals and pharmaceutical ingredients domestically. While this action may pressure drug manufacturers to reduce list prices, there could also be a corresponding, or even disproportionate, decrease in the pharmaceutical rebates that we negotiate and typically receive. Since the expectation of these rebates is factored into our premium pricing strategy, a reduction in rebates that outpaces any decline in underlying drug costs could exert financial pressure, potentially leading to an adverse impact on our earnings from operations and an increase in our MLR.

Current wording

The Trump administration has indicated that new tariffs may be imposed on a variety of products relevant to our business, including certain pharmaceutical products and ingredients and medical devices and supplies imported into the United States. For example, on April 2, 2026, the Trump administration issued a proclamation under Section 232 of the Trade Expansion Act imposing 100% tariffs on patented pharmaceuticals and associated pharmaceutical ingredients, imported into the United States, which took effect on July 31, 2026 for certain enumerated companies, and on September 29, 2026 for all other companies, unless manufacturers agreed to specific government drug pricing deals or committed to shifting production and research and development of patented pharmaceuticals and pharmaceutical ingredients domestically. While this action may pressure drug manufacturers to reduce list prices, there could also be a corresponding, or even disproportionate, decrease in the pharmaceutical rebates that we negotiate and typically receive. Since the expectation of these rebates is factored into our premium pricing strategy, a reduction in rebates that outpaces any decline in underlying drug costs could exert financial pressure, potentially leading to an adverse impact on our earnings from operations and an increase in our MLR.

Previous wording

Our membership is measured as of a particular point in time. Membership may vary throughout the year due to disenrollments, SEP, and other market dynamics that are in effect. Member disenrollments typically result from voluntary termination by members, non-payment of premiums beyond the member’s grace period, or removal by CMS for failure to meet program integrity requirements or in accordance with fraud, waste, and abuse laws and regulations. In accordance with federal regulations, members receiving APTC subsidies are entitled to a 90-day grace period for the non-payment of premiums. For all other member enrollees, the grace period is typically 30 days, subject to specific state requirements. Market dynamics may include but are not limited to enhancements, extensions, reductions or eliminations of APTCs; other legislative or regulatory actions, such as recent Congressional and CMS initiatives to improve the integrity in the ACA eligibility and enrollment process and pre-enrollment verification procedures; Medicaid redeterminations; or other factors that may cause the overall market to grow or decline. As of July 1, 2026, there were approximately 250 thousand to 300 thousand members who we expect will be retroactively disenrolled in connection with CMS program integrity requirements or fraud, waste and abuse laws and regulations. For more information on the recognition of premium related to membership, see“Note 3 - Revenue Recognition”.

Current wording

Our membership is measured as of a particular point in time. Membership may vary throughout the year due to disenrollments, SEP, and other market dynamics that are in effect. Member disenrollments typically result from voluntary termination by members, non-payment of premiums beyond the member’s grace period, or removal by CMS for failure to meet program integrity requirements or in accordance with fraud, waste, and abuse laws and regulations. In accordance with federal regulations, eligible members receiving APTC subsidies are entitled to a 90-day grace period for the non-payment of premiums. For all other eligible member enrollees, the grace period is typically 30 days, subject to specific state requirements. Market dynamics may include but are not limited to enhancements, extensions, reductions or eliminations of APTCs; other legislative or regulatory actions, such as recent Congressional and CMS initiatives to improve the integrity in the ACA eligibility and enrollment process and pre-enrollment verification procedures; Medicaid redeterminations; or other factors that may cause the overall market to grow or decline.

Previous wording

The risk adjustment programs in the markets we serve are administered federally by CMS and are designed to mitigate the potential impact of adverse selection and provide stability for Health Insurance Entities. Under these programs, each plan is assigned a risk score based upon demographic information and current year claims information related to its members. The risk score is used to adjust plan revenue to reflect the relative risk of the plan's enrolled population. 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. We reevaluate our risk adjustment transfer estimates as new information and market data becomes available, until we receive the final reporting from CMS in later periods, up to twelve months in arrears. 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. For the six months ended June 30, 2026, risk adjustment transfer payables were approximately 20% of direct policy premium revenue, up 4% compared to the same period in 2025.

Current wording

The risk adjustment programs in the markets we serve are administered federally by CMS and are designed to mitigate the potential impact of adverse selection and provide stability for Health Insurance Subsidiaries. Under these programs, each plan is assigned a risk score based upon demographic information and current year claims information related to its members. The risk score is used to adjust plan revenue to reflect the relative risk of the plan's enrolled population. 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. We reevaluate our risk adjustment transfer estimates as new information and market data becomes available, until we receive the final reporting from CMS in later periods, up to twelve months in arrears. 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. For the nine months ended September 30, 2026 and 2025, risk adjustment transfer payables were approximately 17% of direct policy premium revenue.

Previous wording

Our risk transfer estimates are subject to a high degree of estimation and variability, and are affected by the relative risk of our members, and in the case of the ACA, that of other insurers. The data we rely upon to calculate these estimates includes data received from independent third parties. In addition, the data may be incomplete, can vary considerably from period to period, requires considerable judgment in interpretation, lacks context, and provides limited insight. Moreover, our risk transfer estimates are subject to change due to factors outside of our control, such as changes in legislation, regulations, regulatory inquiries and enforcement, enrollment in government health plans, inflation, market size, market morbidity, the actions of our competitors, and other uncertainties. There is a higher degree of uncertainty associated with estimates of risk adjustment transfers earlier in the policy year or, in the case of SEP driven enrollment, throughout the policy year, resulting from the fact that risk scores are based on lagged claim data. There is additional uncertainty for both markets and blocks of business that experience outsized growth, compounded by the lack of credible experience data on the newly enrolling population, including SEP driven enrollees and new members moving from one government program to another. Furthermore, there is also uncertainty associated with changes in other carriers’ operations, which may impact the ultimate degree of market-level risk. Actual risk adjustment calculations and transfers have in the past materially differed, and could materially differ in the future, from our assumptions.

Current wording

Our risk adjustment transfer estimates are subject to a high degree of estimation and variability, and are affected by the relative risk of our members, and in the case of the ACA, that of other insurers. The data we rely upon to calculate these estimates includes data received from independent third parties. In addition, the data may be incomplete, can vary considerably from period to period, requires considerable judgment in interpretation, lacks context, and provides limited insight. Moreover, our risk adjustment transfer estimates are subject to change due to factors outside of our control, such as changes in legislation, regulations, regulatory inquiries and enforcement, enrollment in government health plans, inflation, market size, market morbidity, the actions of our competitors, and other uncertainties. There is a higher degree of uncertainty associated with estimates of risk adjustment transfers earlier in the policy year or, in the case of SEP driven enrollment, throughout the policy year, resulting from the fact that risk scores are based on lagged claim data. There is additional uncertainty for both markets and blocks of business that experience outsized growth, compounded by the lack of credible experience data on the newly enrolling population, including SEP driven enrollees and new members moving from one government program to another. Furthermore, there is also uncertainty associated with changes in other carriers’ operations, which may impact the ultimate degree of market-level risk. Actual risk adjustment calculations and transfers have in the past materially differed, and could materially differ in the future, from our assumptions.

Previous wording

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 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.

Current wording

The Company receives a fixed premium per member per month during the period in which the Company is obligated to provide services to its members based on eligibility criteria provided by 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.