Oscar Health (OSCR) might be the Stripe of insurance

Oscar Health (OSCR) is growing fast and just hit profitability for the first time, but the most underappreciated reason to be bullish might not show up in the headlines.

According to analyst and Stocktwits host Shay Baloor, the real catalyst is claims deflation, the process of bringing down the average cost of insurance claims over time.

And he believes Oscar may be closer to achieving it than most investors think.

Baloor points to Oscar’s routing engine, the company’s backend tech that helps steer members to lower-cost providers, like urgent care instead of the ER.

It also nudges patients toward doctors with fewer complications and better cost-efficiency.

“That’s real claims deflation,” he wrote. “At scale, this isn’t just a better insurer. It’s the Stripe of insurance infrastructure.”

That’s a bold comparison, but Oscar’s growth metrics help back it up.

Revenue is surging, but so are medical costs

Oscar’s revenue has exploded in recent years.

The company reported $9.1 billion in sales in 2024 — a 56% jump year-over-year — and is forecasting $11.2 billion for 2025. With $3 billion already booked in Q1, it’s on pace to hit that number.

The challenge, as always in health insurance, is managing medical costs.

Since the pandemic, health insurers have faced a spike in claims driven by rising medical inflation and a boom in chronic conditions.

Even the Chicago Fed has flagged the shift, noting a persistent increase in healthcare costs since 2020.

One big contributor is ER visits, which are dramatically more expensive than urgent care. As Xpress Wellness explains, every individual ER service is billed separately, which is a massive cost driver for insurers.

That’s where Oscar’s tech-forward routing strategy comes in.

Its Q1 medical loss ratio (MLR) — which tracks the share of premiums spent on claims — rose slightly to 75.4%, up from 74.2% a year earlier.

But that’s still well below the company’s 2024 full-year average of 81.7%, suggesting it's getting better at controlling costs.

Despite that, the market hasn’t rewarded it yet. Oscar’s stock is flat on the year and down over 10% in the past 12 months. Its market cap sits around $3.4 billion.

But if claims deflation kicks in at scale, Oscar might not just be another health insurer. It could become the back-end platform that reshapes how care is delivered and paid for.