CVS Health and Oscar Health have reported sharply contrasting 2025 results, highlighting how the same inflationary, regulatory and utilization trends hit large diversified incumbents and ACA-focused challengers very differently. Both signaled 2026 as a key year for improved performance.
CVS: record revenue but profit hit by one‑offs and IRA timing
CVS Health posted fourth‑quarter 2025 revenue of $105.7 billion, up 8.2% year on year, and full‑year revenue of $402.1 billion, a 7.8% increase and a company record.
Earnings told a different story. Full‑year operating income fell 45.3% to $4.66 billion, largely due to a $5.7 billion goodwill impairment in its Health Care Delivery unit and roughly $1.2 billion in legacy litigation charges taken during 2025. Those were partly offset by higher adjusted operating income and the absence of about $1.2 billion in restructuring costs booked in 2024.
Fourth‑quarter GAAP diluted EPS rose to $2.30 from $1.30, helped by a tax benefit linked to a worthless stock deduction on a bankrupt subsidiary. Adjusted EPS slipped to $1.09 from $1.19, reflecting weaker Health Care Benefits results tied to Inflation Reduction Act (IRA)‑driven changes in Medicare Part D seasonality. For the full year, GAAP diluted EPS dropped to $1.39 from $3.66, while adjusted EPS rose to $6.75 from $5.42. Cash flow from operations was $10.6 billion.
Health Care Benefits revenue increased to $143.4 billion, with adjusted operating income rebounding to $2.94 billion from $307 million and the medical benefit ratio improving to 91.2% from 92.5%. Fourth‑quarter performance, however, was pressured by the new Part D cost pattern and premium deficiency reserves.
Health Services revenue climbed to $190.4 billion, up 9.7%, with adjusted operating income down 1.3% to $7.15 billion as client price improvements and a higher medical loss in care delivery offset better purchasing economics. Pharmacy & Consumer Wellness revenue rose 11.9% to $139.4 billion, and adjusted operating income increased to $6.04 billion, supported by prescription growth – including from acquired Rite Aid files – and favorable drug mix.
CVS reaffirmed 2026 GAAP diluted EPS guidance of $5.94–$6.14 and adjusted EPS of $7.00–$7.20, but cut its operating cash flow outlook to at least $9.0 billion from at least $10.0 billion. President and CEO David Joyner said the results showed “the progress we [were] making in transforming the health care experience,” and pointed to the company’s integrated model as a competitive strength in managing cost pressures and regulatory change.
Oscar: revenue surge, loss ratio spike and 2026 reset
Meanwhile, Oscar Health reported 2025 revenue of $11.7 billion, up from $9.2 billion in 2024, driven by growth in the individual and small‑group market. Membership rose to 2.04 million from 1.68 million, even after the Cigna+Oscar small‑group partnership was not renewed at the end of 2024.
The medical loss ratio jumped to 87.4% from 81.7%, reflecting higher market morbidity and greater net risk‑adjustment accruals, along with utilization that was not fully offset by risk adjustment. The SG&A ratio improved to 17.5% from 19.1% on cost leverage and lower exchange fees.
Loss from operations was $396.4 million, compared with 2024 operating income of $57.3 million. Net loss attributable to Oscar was $443.2 million, or –$1.69 per diluted share, versus net income of $25.4 million, or $0.10 per share. Adjusted EBITDA swung to a loss of $279.8 million from positive $199.2 million.
CEO Mark Bertolini called 2025 “a reset year for the individual market” and said new lower‑priced products, “agentic AI” features and member‑experience investments positioned Oscar for “significantly improved financial performance in 2026.”
Guidance for 2026 included revenue of $18.7 to $19.0 billion, a medical loss ratio of 82.4 to 83.4% and earnings from operations of $250 to $450 million. The company also secured a $475 million three‑year revolving credit facility in February 2026 to bolster liquidity and support planned growth.
Taken together, the numbers underscore a key theme that in a year of elevated medical costs, shifting Medicare and ACA dynamics, and higher interest rates, CVS’s diversified, vertically integrated model absorbed much of the shock while Oscar’s ACA‑concentrated book took the full force of utilization and risk‑adjustment volatility, prompting an explicit 2026 course correction and a sharper focus on pricing, product design and capital flexibility.
