Oscar Health, Inc. (OSCR) stock surged 19.13% in pre-market trading on Friday, building on its recent momentum following the release of 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 the impact of new CEO Mark Bertolini's initiatives since taking the helm in April 2023.

Adding to the positive sentiment is the recently introduced Choose Medicare Act, which proposes a Medicare Part E public option available through ACA marketplaces. If passed, this legislation could substantially expand Oscar's addressable market, potentially tripling it. The company's established infrastructure and experience in operating profitably in individual markets through digital distribution on government exchanges position it favorably to capitalize on this potential opportunity. Despite the stock's 40% rise year-to-date, some analysts maintain conservative price targets, suggesting that Wall Street may be underestimating the company's growth potential in light of these developments.