Oscar Health, Inc. (OSCR) stock surged 19.13% in pre-market trading on Friday, following the release of its exceptional Q1 2025 financial results and growing optimism about potential Medicare expansion. The tech-native insurer has successfully transformed from a money-losing startup to a profitable growth story, validating its digital-first model in the health insurance industry.

The company reported a net income of $275 million on $3 billion in revenue for Q1 2025, representing a 42% year-over-year growth. This performance significantly exceeded analyst expectations, with diluted earnings per share of $0.92 surpassing consensus estimates by over 14%. Oscar Health's operational improvements were evident in its record-low SG&A ratio of 15.8% and an improved medical loss ratio of 75.4%, reflecting enhanced cost control and expanding operating leverage.

Adding to the positive sentiment is the proposed Choose Medicare Act, introduced by Democrats in June 2025. This legislation, if passed, could create a Medicare Part E public option available through ACA marketplaces, potentially tripling Oscar Health's addressable market. With its digital-first approach and established presence in ACA exchanges, the company is well-positioned to capitalize on this potential market expansion. Investors are betting on Oscar Health's ability to leverage its technology platform and operational efficiency to capture a significant share of this expanded market, further fueling the stock's impressive rally.