[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Kaushik [@BigBullCap](/creator/twitter/BigBullCap) on x 102.4K followers Created: 2025-07-10 13:08:48 UTC $OSCR PT Lowered to $X at Jefferies In Exhibit 1, we apply CNC's risk adjustment (RA) "miss" to OSCR and MOH. OSCR is most at risk as a HIX pure play and ~90% of premiums from states where risk pool shifts should be most dramatic (FFM + non-expansion) and, therefore, estimating RA elements is most complicated. If OSCR experiences the same impact as CNC, PY25 RA payable needs to increase ~$880M (JEFe). Caveat: Each company's accrual starting point could vary based on mgts' relative conservatism. OSCR Likely Made the Same RA Reserving Mistake as CNC. Since OSCR hasn't yet disclosed impact of the initial PY25 HIX risk adjustment (RA) data, our next best option to address investor questions is to compare its situation to CNC's. From PY24 to PY25 (as judged by looking at 1Q25), CNC's RA accruals were ~consistent y/y. CNC's "miss", and the largest driver of withdrawn guidance, was accruing to a scenario where its risk scores moved in tandem with industry average risk scores. From the preannouncement, industry risk scores increased ~6.3% more than CNC's own book in its states (JEFe), hence the need to increase net payables. Recall that we have highlighted the much more significant enrollment growth in Medicaid non-expansion states using the Federal exchange (FFM + non-exp). We use that analysis to estimate magnitudes of risk score "miss" by state category in Ex X. Those estimates foot to our $2.2B total, PY25 RA payable increase for CNC. OSCR Shows a Similar Fact Pattern. Mgt's 1Q call comments indicated intent to accrue PY25 RA consistent with PY24. Net of the $92M adjustment discussed on the 1Q25 call, OSCR accrued a ~15% payable for PY24, but actually started 2025 at just XXX% in 1Q25. How can 1Q's ~7% variation vs FY24 be explained? One argument could be seasonality, where the accrual started lower (similar to PY24, but was to rise through PY25; that's still a headwind). Another scenario could be that OSCR members' risk scores landed ~7% above expectations, and OSCR assumed unchanged industry risk scores. CNC has shown us the latter assumption would be wrong. We've consistently pointed to evidence that FL, GA, and TX appeared to be the most distorted markets, where OSCR has XX% of its membership. Using the same risk score "miss" estimates and applying to OSCR's riskier exposure, yields a XXX% wtd average "miss" or ~$880M in increased RA payable. XXXXXX engagements  **Related Topics** [$880m](/topic/$880m) [cnc](/topic/cnc) [$oscr](/topic/$oscr) [Post Link](https://x.com/BigBullCap/status/1943296348599783900)
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Kaushik @BigBullCap on x 102.4K followers
Created: 2025-07-10 13:08:48 UTC
$OSCR PT Lowered to $X at Jefferies
In Exhibit 1, we apply CNC's risk adjustment (RA) "miss" to OSCR and MOH. OSCR is most at risk as a HIX pure play and ~90% of premiums from states where risk pool shifts should be most dramatic (FFM + non-expansion) and, therefore, estimating RA elements is most complicated. If OSCR experiences the same impact as CNC, PY25 RA payable needs to increase ~$880M (JEFe). Caveat: Each company's accrual starting point could vary based on mgts' relative conservatism. OSCR Likely Made the Same RA Reserving Mistake as CNC. Since OSCR hasn't yet disclosed impact of the initial PY25 HIX risk adjustment (RA) data, our next best option to address investor questions is to compare its situation to CNC's. From PY24 to PY25 (as judged by looking at 1Q25), CNC's RA accruals were ~consistent y/y. CNC's "miss", and the largest driver of withdrawn guidance, was accruing to a scenario where its risk scores moved in tandem with industry average risk scores. From the preannouncement, industry risk scores increased ~6.3% more than CNC's own book in its states (JEFe), hence the need to increase net payables. Recall that we have highlighted the much more significant enrollment growth in Medicaid non-expansion states using the Federal exchange (FFM + non-exp). We use that analysis to estimate magnitudes of risk score "miss" by state category in Ex X. Those estimates foot to our $2.2B total, PY25 RA payable increase for CNC. OSCR Shows a Similar Fact Pattern. Mgt's 1Q call comments indicated intent to accrue PY25 RA consistent with PY24. Net of the $92M adjustment discussed on the 1Q25 call, OSCR accrued a ~15% payable for PY24, but actually started 2025 at just XXX% in 1Q25. How can 1Q's ~7% variation vs FY24 be explained? One argument could be seasonality, where the accrual started lower (similar to PY24, but was to rise through PY25; that's still a headwind). Another scenario could be that OSCR members' risk scores landed ~7% above expectations, and OSCR assumed unchanged industry risk scores. CNC has shown us the latter assumption would be wrong. We've consistently pointed to evidence that FL, GA, and TX appeared to be the most distorted markets, where OSCR has XX% of its membership. Using the same risk score "miss" estimates and applying to OSCR's riskier exposure, yields a XXX% wtd average "miss" or ~$880M in increased RA payable.
XXXXXX engagements
