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Oscar(OSCR) - 2023 Q4 - Annual Report
OSCROscar(OSCR)2024-02-15 21:06
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Company Overview - Oscar Health, Inc. had 14 health insurance subsidiaries as of December 31, 2023[16]. - The company is actively involved in government-sponsored programs, such as Medicare, which requires compliance with various laws and regulations[23]. - Oscar Health operates through state-run healthcare exchanges, leveraging its technology platform to enhance member experience[470]. - The company has partnered with Cigna to serve the small group employer market, combining Oscar's member experience with Cigna's provider networks[470]. Financial Performance - Total revenue for the year ended December 31, 2023, was 5,862.9million,anincreasefrom5,862.9 million, an increase from 3,963.6 million in 2022[456]. - Claims incurred, net for 2023 amounted to 4,642.0million,comparedto4,642.0 million, compared to 3,280.8 million in 2022, reflecting a significant increase[456]. - The net loss attributable to Oscar Health, Inc. for 2023 was 270.7million,adecreasefromanetlossof270.7 million, a decrease from a net loss of 606.3 million in 2022[456]. - The comprehensive loss attributable to Oscar Health, Inc. for 2023 was 259.7million,comparedto259.7 million, compared to 612.3 million in 2022[459]. - The total current assets decreased from 4,121.6millionin2022to4,121.6 million in 2022 to 3,061.1 million in 2023[454]. - The total liabilities decreased from 3,634.2millionin2022to3,634.2 million in 2022 to 2,795.4 million in 2023[454]. - The additional paid-in capital increased from 3,509.0millionin2022to3,509.0 million in 2022 to 3,682.3 million in 2023[454]. - Cash flows from operating activities resulted in a net cash used of 272,159,000in2023,asignificantdecreasefromthenetcashprovidedof272,159,000 in 2023, a significant decrease from the net cash provided of 380,349,000 in 2022[464]. - The company reported a total cash, cash equivalents, and restricted cash of 1,891,971,000attheendof2023,upfrom1,891,971,000 at the end of 2023, up from 1,580,497,000 at the end of 2022[464]. Membership and Enrollment - Oscar Health's membership is affected by enrollment changes, including retroactive disenrollments, which may impact overall member counts[20]. - The 2024 Open Enrollment Period for the ACA individual market began on November 1, 2023, and will last through at least January 15, 2024[20]. Risk Management - Oscar Health's primary market risk exposure is driven by changes to prime rate-based interest rates, with a hypothetical 1% increase potentially decreasing the fair value of investments by approximately 8.2million[430].−Thecompanyissubjecttovariousrisks,includingcompetition,regulatorychanges,andtheabilitytomanagemedicalcostseffectively[23].−OscarHealth′sstrategyincludesutilizingquotasharereinsurancetomeetcapitalandsurplusrequirementsandmitigaterisksassociatedwithmedicalclaims[23].−Thecompanyutilizesreinsuranceagreementstomanageexposuretofluctuationsinmedicallossratio(MLR)andmeetcapitalrequirements[484].ClaimsandBenefits−TheCompany’sincurredbutnotreported(IBNR)benefitspayablewas8.2 million[430]. - The company is subject to various risks, including competition, regulatory changes, and the ability to manage medical costs effectively[23]. - Oscar Health's strategy includes utilizing quota share reinsurance to meet capital and surplus requirements and mitigate risks associated with medical claims[23]. - The company utilizes reinsurance agreements to manage exposure to fluctuations in medical loss ratio (MLR) and meet capital requirements[484]. Claims and Benefits - The Company’s incurred but not reported (IBNR) benefits payable was 966.0 million as of December 31, 2023, primarily related to low dollar claims[443]. - The risk adjustment transfer payable was 1,056.9millionasofDecember31,2023,undertheAffordableCareAct′sriskadjustmentprogram[446].−TotalclaimsincurredfortheyearendedDecember31,2023,is1,056.9 million as of December 31, 2023, under the Affordable Care Act's risk adjustment program[446]. - Total claims incurred for the year ended December 31, 2023, is 4,622,263,000, compared to 3,279,461,000in2022,indicatinganincreaseofapproximately40.93,279,461,000 in 2022, indicating an increase of approximately 40.9%[551]. - Total claims paid for the year ended December 31, 2023, is 4,392,932,000, up from 2,975,417,000in2022,markinganincreaseofabout47.52,975,417,000 in 2022, marking an increase of about 47.5%[553]. - Benefits payable at the end of 2023 is 965,986,000, an increase from 937,727,000in2022,reflectingariseofabout3.1937,727,000 in 2022, reflecting a rise of about 3.1%[546]. Stock and Compensation - Stock-based compensation expense increased to 159,683,000 in 2023 from 112,329,000in2022,reflectingariseinemployeecompensationcosts[464].−Totalstock−basedcompensationexpensefor2023was112,329,000 in 2022, reflecting a rise in employee compensation costs[464]. - Total stock-based compensation expense for 2023 was 166.841 million, an increase of 48.4% from 112.329millionin2022[557].−ThetotalfairvalueofRSUsvestedin2023was112.329 million in 2022[557]. - The total fair value of RSUs vested in 2023 was 89.7 million, an increase from 68.4millionin2022[566].−CompensationexpenseforPSUsin2023was68.4 million in 2022[566]. - Compensation expense for PSUs in 2023 was 64.9 million, significantly higher than 25.3millionin2022[575].LegalandRegulatoryMatters−TheCompanyiscurrentlyinvolvedinlegalproceedings,includingasecuritiesclassactionlawsuitrelatedtoitsIPO,whichallegesfailuretodisclosecertaincostsandrisks[617].−TheCompanybelievesithasmeritoriousdefensesagainsttheclaimsinthesecuritiesclassactionlawsuitbutcannotpredicttheoutcome[617].AccountingandCompliance−Thecompanyemphasizestheimportanceofmaintainingeffectiveinternalcontroloverfinancialreportingaspartofitsoperationalstrategy[440].−Thecompanyisevaluatingtheimpactofnewaccountingstandardsonitsconsolidatedfinancialstatements,effectiveforfiscalyearsbeginningafterDecember15,2023[513].−TheCompanyrecordedaprovisionforcreditlossesof25.3 million in 2022[575]. Legal and Regulatory Matters - The Company is currently involved in legal proceedings, including a securities class action lawsuit related to its IPO, which alleges failure to disclose certain costs and risks[617]. - The Company believes it has meritorious defenses against the claims in the securities class action lawsuit but cannot predict the outcome[617]. Accounting and Compliance - The company emphasizes the importance of maintaining effective internal control over financial reporting as part of its operational strategy[440]. - The company is evaluating the impact of new accounting standards on its consolidated financial statements, effective for fiscal years beginning after December 15, 2023[513]. - The Company recorded a provision for credit losses of 28.6 million for the year ended December 31, 2023[497]. Capital and Surplus - As of December 31, 2023, the Company's insurance subsidiaries had an aggregate statutory capital and surplus of 800.6million,upfrom800.6 million, up from 701.5 million in 2022, exceeding minimum required statutory capital and surplus[613]. - The Company authorized 825,000,000 shares of Class A common stock and 82,500,000 shares of Class B common stock in connection with the IPO[605].