The Affordable Care Act (ACA) marketplace remains a battleground for health insurers, with competitive pressures and regulatory shifts shaping the fortunes of key players like Oscar Health (OSCR) and Centene (CNC). Recent market sentiment suggests a particularly turbulent period for Oscar Health, with share price volatility reflecting broader concerns about profitability in this segment. A notable perspective on social platforms, such as a comment from an account like alexcapital01 on X, hints at external pressures impacting Oscar Health’s stock. However, the real story lies in the underlying financials and strategic positioning of these companies as they grapple with rising medical costs and evolving consumer demand in 2025.
Oscar Health: Revenue Growth Amidst Profitability Challenges
Oscar Health, a technology-driven insurer focused on individual and small group plans, has shown impressive top-line growth in recent quarters. According to the company’s preliminary financial results for Q2 2025 (April to June), revenue guidance for the full year has been revised upwards to a range of $12 billion to $12.2 billion, representing a year-on-year increase of 31% to 33%. This growth is driven by expanding membership in the ACA marketplace, where Oscar has carved out a niche through digital-first engagement and partnerships with healthcare providers.
However, the picture darkens when examining profitability metrics. The same guidance update revealed a projected operating loss of $200 million to $300 million for 2025, a sharp reversal from earlier expectations of positive earnings. A key driver of this downturn is the medical loss ratio (MLR), expected to rise to 86% to 87% in 2025, up from 81% in 2024. This indicates that a higher proportion of premium revenue is being spent on medical claims, squeezing margins. Additionally, while the selling, general, and administrative (SG&A) expense ratio is projected to improve to 17.1% to 17.6% from 19% in 2024, it offers little relief against the backdrop of escalating claims costs.
Centene: A Heavyweight Facing Similar Pressures
Centene, a dominant force in the ACA marketplace and Medicaid managed care, is not immune to these challenges. As a larger and more diversified player, Centene’s exposure spans multiple government-sponsored programmes, with ACA plans forming a critical growth area. In its Q2 2025 (April to June) earnings update, Centene reported a year-on-year revenue increase of approximately 6%, reaching $39.91 billion for the quarter. On a full-year basis, Centene now forecasts revenue in the range of $158 billion to $160 billion, broadly unchanged but indicative of market stability. However, like Oscar, it faced margin compression, with an MLR of 87.5% compared to 86.2% in Q2 2024, reflecting higher utilisation of medical services by enrollees.
The parallels between Oscar Health and Centene are striking. Both companies are contending with a post-pandemic normalisation of healthcare utilisation, where pent-up demand for elective procedures and chronic care management drives up costs. For Centene, the scale of its operations provides some buffer, but its ACA segment remains a pressure point as competitive pricing strategies erode profitability. Investors are keenly watching whether Centene can leverage its broader portfolio to offset these headwinds.
Comparative Financial Snapshot
The table below provides a snapshot of key financial metrics for Oscar Health and Centene based on their latest 2025 updates. All figures pertain to full-year guidance unless otherwise stated.
| Company | Revenue (2025 Est.) | MLR (2025 Est.) | Operating Income/Loss (2025 Est.) |
|---|---|---|---|
| Oscar Health (OSCR) | $12B to $12.2B | 86% to 87% | Loss of $200M to $300M |
| Centene (CNC) | $158B to $160B | 87% to 88% | Profit of $2.5B to $2.7B |
While Centene’s sheer size dwarfs Oscar Health, the latter’s growth rate is notably higher, reflecting its focus on a narrower, high-growth segment of the market. Yet, the operating loss at Oscar underscores the risks of rapid expansion in a cost-intensive environment.
Market Dynamics and Investor Sentiment
The ACA marketplace in 2025 is shaped by several macro factors. First, the extension of enhanced subsidies under the Inflation Reduction Act has boosted enrolment, with over 21.3 million individuals signing up for plans during the 2025 open enrolment period, a 9% increase from 2024. This growth benefits insurers like Oscar and Centene but also intensifies competition, as players undercut each other on premiums to capture market share. Second, regulatory scrutiny over rate filings and benefit designs adds uncertainty, particularly for smaller insurers with less negotiating power.
Investor sentiment, as gauged from recent analyst reports and market reactions, remains cautious. Oscar Health’s stock has experienced significant volatility, with a 10% drop in a single day following its revised guidance announcement in July 2025. Analysts at Jefferies have lowered their price target for Oscar to $8, citing concerns over sustained operating losses. Centene, while more stable, has not escaped criticism, with some investors questioning whether its ACA exposure could drag down overall performance if medical cost trends do not abate.
Looking Ahead: Strategic Implications
For Oscar Health, the path forward hinges on balancing growth with cost control. Investments in technology to streamline claims processing and improve risk selection could help, but these are long-term plays in a market demanding short-term results. Centene, meanwhile, may need to reassess pricing strategies in its ACA plans to protect margins, even if it means ceding some market share to nimbler competitors.
Both companies face a common enemy: the unpredictability of medical cost inflation. If utilisation rates continue to climb, particularly among high-cost populations, the ACA marketplace could become a less attractive arena for growth. Investors would do well to monitor quarterly MLR trends and enrolment data as leading indicators of whether these insurers can navigate the storm. With a wry nod to the market’s penchant for overreaction, it might be said that the current pessimism offers a contrarian opportunity, provided one has the stomach for the inevitable bumps along the way.
References
- alexcapital01 [@alexcapital01]. (2025). [Various posts regarding OSCR market sentiment]. X. Retrieved from multiple posts including https://x.com/alexcapital01/status/1945214762624679990, https://x.com/alexcapital01/status/1941965526332526826, https://x.com/alexcapital01/status/1949119034974167365, https://x.com/alexcapital01/status/1947631872563155402, and https://x.com/alexcapital01/status/1948453851851620492
- Centene Corporation. (2025, July). Q2 2025 Earnings Release. Retrieved from https://investors.centene.com
- Centers for Medicare & Medicaid Services. (2025, June 16). 2025 Marketplace Open Enrollment Period Report. Retrieved from https://www.cms.gov/newsroom/fact-sheets/2025-marketplace-open-enrollment-period-report
- Financial Content. (2025, July 23). History of Oscar Health Inc: Revolutionizing Health Insurance with Technology, Stock and Share Overview (NYSE:OSCR). Retrieved from https://markets.financialcontent.com/wral/article/marketminute-2025-7-23-history-of-oscar-health-inc-revolutionizing-health-insurance-with-technology-stock-and-share-overview-nyseoscr
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- Oscar Health, Inc. (2025, July 22). Oscar Health Announces Preliminary Financial Results for Second Quarter 2025 and Revises 2025 Guidance. Business Wire. Retrieved from https://www.businesswire.com/news/home/20250722772545/en/Oscar-Health-Announces-Preliminary-Financial-Results-for-Second-Quarter-2025-and-Revises-2025-Guidance
- Reuters. (2025, July 22). Centene forecasts full-year revenue in line with estimates; enrolment, margins in focus. Retrieved from https://www.reuters.com/business/healthcare-pharmaceuticals/centene-forecasts-full-year-revenue-line-with-estimates-2025-07-22/
- Seeking Alpha. (n.d.). Oscar Health, Inc. (OSCR). Retrieved September 2024, from https://seekingalpha.com/symbol/OSCR
- Sherwood News. (2025). Oscar Health Whipsaws After Preliminary Q2 Earnings and Guidance; Centene Struggles. Retrieved from https://sherwood.news/markets/oscar-health-whipsaws-after-preliminary-q2-earnings-and-guidance-centene-struggles/
- Sykes, T. (2025, July 23). Oscar Health Inc (OSCR) News. Timothy Sykes. Retrieved from https://www.timothysykes.com/news/oscar-health-inc-oscr-news-2025_07_23/
- TradingView. (n.d.). Oscar Health Inc. Retrieved September 2024, from https://www.tradingview.com/symbols/NYSE-OSCR/
- Yahoo Finance. (n.d.). Oscar Health, Inc. (OSCR). Retrieved September 2024, from https://finance.yahoo.com/quote/OSCR/
- Yahoo Finance. (2025, July 23). Oscar Health (OSCR) Updates 2025 Guidance with Revenue at US$12 Billion. Retrieved from https://finance.yahoo.com/news/oscar-health-oscr-updates-2025-174216635.html
