The Trump administration has floated a healthcare proposal in Congress that favours extending the Affordable Care Act (ACA) subsidies. Many Republicans oppose the idea. Meanwhile, Oscar Health gained 8.55% midweek on the New York Stock Exchange the day before the Thanksgiving break.
Many Americans want an extension of the ACA or 'Obamacare' subsidies because any increase in health insurance premiums is a financial shock to them. Furthermore, if President Donald Trump allows the subsidies to expire, the ripple effect across the entire healthcare system, as well as the economy, would be enormous.
Heightened Investors' Interest
Why did Oscar Health receive significant investor attention? First, Piper Sandler upgraded its rating for the growth-oriented healthcare company from neutral to buy. The American banking powerhouse also raised its price target from $13 (£9.82) to $25 (£11.43).
Second, even if ACA subsidies were to expire, Oscar Health is well-positioned to grow market share and achieve profitability. Performance-wise, the healthcare stock has been steady for most of 2025. The year-to-date gain is 35%, while the overall return in three years is 532.75%.
Regarding profits, Oscar Health reported net income of $25.4 million (£19.4 million) in 2024 after incurring an average net loss of $478 million (£382.4 million) over three years.
For the Working People
Mark Bertolini, CEO of Oscar Health, said, 'Our market serves the small business, service, and farming sectors, and can meet the healthcare needs of 100 million more working people.'
In Q3 2025, the medical loss ratio (MLR) increased to 88.5% from 84.8% in Q3 2024. MLR refers to the percentage of a policyholder's premium that goes toward actual medical care. An 88.5% MLR means that $0.885 of every $1 goes to care. From an insurer's perspective, a high MLR affects profit margins.
Oscar Health offsets the impact on margins through geographic expansion. 'Oscar is shaping the future of individual healthcare with affordable, innovative plans and a superior member experience,' Bertolini added.
However, after three quarters in 2025, Oscar Health's net loss is $62.6 million (£47.3 million) compared to $178.9 million (£135.3 million) in net income in the same period in 2024. For the full-year 2025, management's MLR guidance is 86% (low) to 87% (high).
ACA Extension Status
Oscar Health shares have surged nearly 35% in three trading days since Trump proposed a two-year extension for the expiring ACA health insurance subsidies. However, Republicans in both houses of Congress are divided on whether to approve the Obamacare extension or let the subsidies expire.
No action, meaning expiration, means millions of Americans will start paying higher monthly payments in 2026. So far, 14 GOP lawmakers support Virginia congresswoman Jen Kiggans' one-year extension proposal.
The bipartisan bill, sponsored by GOP members Don Bacon (R-Neb.) and Jeff Hurd (R-Colo.), along with Tom Suozzi (D-N.Y.) and Josh Gottheimer (D-N.J.), proposes a two-year extension with certain modifications. Some Republicans prefer broader health care reforms instead of extending the ACA subsidies.
Oscar Health Growth Outlook
A two-year extension brings good news for Oscar Health. Because most of its business depends on the ACA marketplace, the company will stabilise enrollment and revenue. Extending the subsidies also prevents premiums from spiking in their absence. Otherwise, Oscar expects enrollment to drop.
For investors, extending the subsidy reduces Oscar Health's downside risk and strengthens its growth outlook. The company can advance its expansion while maintaining its core base of affordable healthcare customers.
The US Congress will resume session on 1 December 2025.
Disclaimer: Our digital media content is for informational purposes only and does not constitute investment advice. Please conduct your own analysis or seek professional guidance before investing. Remember, investments are subject to market risks, and past performance does not guarantee future results.
