Oscar Health Inc. (OSCR) is having quite a week. Shares surged Wednesday on a combination of bullish Wall Street sentiment and regulatory developments that could fundamentally reshape the company's outlook.

The Catalyst Combo

Piper Sandler kicked things off by upgrading the stock from Neutral to Overweight on Wednesday, slashing its price target from $13 all the way up to $25. That's the kind of move that gets traders' attention.

But the real story here is what's happening in Washington. The White House is moving forward with a framework to extend Affordable Care Act subsidies, and for Oscar Health, this isn't just good news—it's existential.

Unlike giant diversified insurers such as UnitedHealth, Oscar's business is uniquely tied to the individual exchange market. The administration's proposal would extend subsidies for two years and raise eligibility caps to 700% of the federal poverty line. For Oscar, that's a lifeline.

Why This Actually Matters

Here's the problem Oscar was facing: without extending these subsidies, consumer premiums would skyrocket. When that happens, healthy people drop their coverage because it's too expensive. What's left? A smaller pool of sicker patients who cost more to insure. Insurance nerds call this "adverse selection," and it's basically a death spiral for companies like Oscar.

The Healthcare Price Cuts Act prevents those premium spikes and incentivizes lower-cost plans through proposed Health Savings Accounts. That means Oscar gets to keep its membership stable instead of watching its business model slowly collapse. Legislative clarity just turned a structural nightmare into a potential growth story, which explains the 25% weekly gain.

The Recent Numbers

Oscar reported third-quarter results earlier this month that were a mixed bag. Revenue came in at $2.99 billion, missing the $3.08 billion consensus. The operating loss widened to $129.3 million, even as membership jumped to 2.12 million.

The company pointed to an 88.5% medical loss ratio driven by higher market morbidity—basically, their customers were sicker than expected. Still, management reaffirmed its full-year 2025 revenue guidance of $12 billion to $12.2 billion, signaling confidence despite the near-term challenges.

Price Action

Oscar Health shares were trading up 9.23% at $18.28 on Wednesday, according to Benzinga Pro data. The stock is clearly trying to capitalize on these new regulatory tailwinds, and investors are betting that the subsidy extension removes one of the biggest question marks hanging over the business.