Oscar Health

I exited Oscar Health in September 2026 because its revenue depends on ACA subsidies: the enhanced credits expired at the end of 2025, insurers filed mostly double-digit increases for 2027, and the underlying cost trend is running near 10%.

This is a more speculative healthcare position. The appeal is strong growth combined with significant use of AI inside the insurance operation itself, applied to claims handling, utilization review and administrative cost rather than used as a marketing layer.

For a smaller insurer that matters more than it would for an incumbent, because administrative expense is a larger share of the cost base. It is not sufficient on its own: underwriting still has to price medical cost correctly.

Oscar's revenue is concentrated in the ACA marketplace, which makes it directly exposed to subsidy policy and to annual risk-pool composition. A single unfavorable enrolment year, or a change to subsidy structure, moves the economics considerably.

Reported earnings are also early and volatile, swinging on reserve development. Policy sensitivity plus thin, unstable margins is why I hold this small and treat it as speculative.