Barclays upgraded Oscar Health Inc. to “overweight” and raised its price target to $35 from $30, arguing that artificial intelligence-driven displacement of entry-level white-collar workers could make the Individual Affordable Care Act market the fastest-growing segment in U.S. health insurance over the next five to 10 years.
The thesis hinges on a prediction by Anthropic chief executive Dario Amodei that "AI will disrupt 50% of entry-level white-collar jobs over 1–5 years."
Barclays analysts said the more important consequence may not be unemployment itself but "the weakening relationship between employment and health benefits," given that roughly half of the U.S. population receives health coverage through an employer.
Historical data shows the relationship is tight. During the dot-com bust from 2000 to 2003, employer-sponsored insurance enrollment fell 2.5% as unemployment rose 200 basis points.
The Global Financial Crisis brought a 500-basis-point jump in unemployment alongside a 5.4% decline in ESI enrollment. During COVID-19, a 300-basis-point unemployment spike produced a 2.3% ESI decline, per U.S. Census data cited in the report.
Post-COVID patterns suggest the ACA has emerged as a more significant safety net than Medicaid. Individual ACA enrollment grew 21% from 2019 to 2021, outpacing Medicaid’s 11% rise over the same period, according to the report.
Barclays forecast 5% to 6% annual ACA exchange membership growth through 2030, compared with 3.0% to 3.5% for Medicare Advantage and a 4.0% to 5.0% contraction in employer-sponsored group risk.
The broker projects ACA enrollment reaching 24.03 million members by 2030 from 19.44 million in 2026.
Graduate unemployment has risen faster than national unemployment since 2023, and employment among workers aged 16 to 24 has lagged the broader workforce, Bureau of Labor Statistics data cited in the report showed.
Gig workers now represent nearly 15% of total employment, up 24% since 2017, with roughly 85% maintaining health insurance, according to BLS data in the report.
On Oscar Health, Barclays set a 2028 earnings-per-share estimate of $2.74 and applied a 14x multiple, up from 12x previously. The broker projected Oscar revenue rising from $11.70 billion in 2025 to $27.37 billion in 2028, a compound annual growth rate of 32.7%.
For Centene, Barclays maintained its “overweight” rating with a $75 price target, citing a bull-case scenario of $9.04 in 2028 upside EPS and a potential stock value near $120 at a 13x multiple.
Cigna was identified as most at risk, with 73% employer-sponsored insurance enrollment exposure and 23% concentration in technology-sector clients, the highest among peers analyzed.
source https://www.investing.com/news/economy-news/what-if-ai-really-does-disrupt-50-of-all-entrylevel-whitecollar-jobs-4741043
