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Oscar Health expects between 250,000 and 300,000 of its marketplace members to be retroactively disenrolled in connection with CMS program integrity initiatives and fraud, waste and abuse enforcement, marking a significant Oscar Health ACA disenrollments CMS disclosure the insurer made Aug. 7.
The Scale of This Oscar Health ACA Disenrollments CMS Estimate
The expected disenrollments represent roughly 8% to 10% of total membership, which stood at approximately 2.96 million as of June 30. The company has added nearly 1 million members over the past year alone, meaning this disenrollment estimate arrives during a period of otherwise substantial membership growth for the insurer.
Rising Churn Expectations for the Second Half of 2026
Oscar said during its Aug. 6 second quarter earnings call that monthly membership churn, previously expected to land around 1% to 2%, will likely be closer to twice that rate in the second half of 2026 as CMS eligibility reviews accelerate.
How Oscar Is Reviewing the CMS File Behind This Disenrollment Estimate
CEO Mark Bertolini said the company is actively reviewing the file it received from CMS. “There are a number of cases where we know that people were authorized appropriately,” he said on the earnings call. “There are a number of cases where we’ve actually had contact with people. So CMS’ list was based on a set of assumptions that they went through on the file. The actual result will depend on our ability to go through those files.”
Why This Verification Process Matters
Bertolini’s comments suggest the final disenrollment figure could shift meaningfully from the initial 250,000-to-300,000 estimate depending on how many cases Oscar’s own review confirms versus disputes, since the company has already identified instances where CMS’s assumptions did not match its own records of legitimately authorized enrollees.
How Oscar’s Financial Guidance Accounts for This Disenrollment Estimate
Bertolini added that any financial impact from disenrollments is already reflected in the company’s full-year guidance, which includes revenue of $18.7 billion to $19 billion and earnings from operations of $500 million to $700 million. This confirmation suggests Oscar built the anticipated churn increase into its financial planning before making the disclosure public.
The Broader Federal Fraud Crackdown Behind This Disclosure
The disclosure comes amid a broader federal push to root out improper ACA enrollments. CMS has estimated that as many as 5.6 million individuals were improperly enrolled in marketplace plans as of 2025 and has removed approximately 1.5 million of those enrollees to date.
The Legal Backdrop to This Oscar Health ACA Disenrollments CMS Situation
Provisions of the agency’s 2025 ACA integrity rule were paused last year by a federal court in Maryland, though HHS has appealed that decision. This ongoing litigation means the regulatory framework underlying CMS’s eligibility reviews remains legally contested even as insurers like Oscar continue processing disenrollments tied to the agency’s fraud crackdown.
Why This Legal Uncertainty Matters for Insurers
With the underlying rule’s legal status still unresolved pending HHS’s appeal, insurers navigating CMS’s eligibility review files face a degree of regulatory uncertainty that could complicate long-term membership and revenue forecasting beyond the current disclosure.
What This Oscar Health ACA Disenrollments CMS Disclosure Means Going Forward
With churn expected to roughly double in the second half of 2026 and Bertolini’s team still working through CMS’s file case by case, the final disenrollment total could land anywhere within or potentially outside Oscar’s stated 250,000-to-300,000 range depending on how many contested cases are resolved in the insurer’s favor. Given that Oscar has already built the anticipated financial impact into its full-year guidance, investors and industry observers have some assurance that this disclosure represents a known and quantified risk rather than an emerging surprise.
What to Watch Going Forward
As Oscar continues reviewing CMS’s eligibility file throughout the second half of 2026, industry observers will likely watch whether the final disenrollment count comes in closer to the low or high end of the company’s estimated range, and whether other ACA marketplace insurers disclose similar figures tied to the same federal fraud crackdown. Given the pending HHS appeal of the Maryland court’s injunction against the 2025 ACA integrity rule, this Oscar Health ACA disenrollments CMS situation may also serve as an early indicator of how the broader legal dispute over CMS’s enforcement authority could affect marketplace insurers nationally as the litigation proceeds.
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