Healthcare may not be as hot an industry as space or artificial intelligence (AI), but it’s much larger than either today. Trillions of dollars are spent on healthcare in the United States every year, a figure that’s set to grow faster than inflation as the country’s average age rises over the next few decades.
It is a massive industry ripe for disruption, with stakeholders across the board upset with legacy systems, such as traditional health insurance, that underperform for customers. Some brave companies are trying to change this paradigm, such as Oscar Health (NYSE: OSCR).
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The start-up health insurer is up 90% this year, and with a market cap of just $8.6 billion, it still has plenty of room to grow in the years ahead. Here’s why the stock is still a buy for investors in 2026 and beyond.
Disrupting the health insurance market
Oscar Health was founded back in 2012 to take advantage of the new Affordable Care Act (ACA) health insurance marketplace. After the new health insurance laws were enacted during the Obama administration, more individuals were paying for coverage through state-regulated marketplaces, which Oscar wanted to address.
Through fits and starts, Oscar has grown its customer base over the past few years at roughly the pace of the ACA marketplace, while also taking market share from existing players. At the end of last quarter, it had 3.2 million customers, making it one of the largest players in the ACA marketplace.
How has Oscar Health done this? It’s pretty simple: The company provides a better customer experience at a price similar to other health insurance plans. Through services like free telehealth, dedicated online customer-service reps, and modern digital tools, Oscar Health has achieved much higher customer satisfaction than old-school health insurance companies, which are not well-liked by many customers.
Profit surprise, but more ahead
Oscar Health has not been consistently profitable over its history, but that’s due to the necessary scale needed to operate a health insurer in all 50 states. Now, with millions of Oscar health insurance customers, the company is finally leveraging its network to generate more revenue without the proportional increase in baseline expenses.