Alignment Healthcare Thursday reported a loss in its third quarter of $35 million even as the startup provider of Medicare Advantage coverage grows its membership to more than 115,000.
Alignment, which improved its bottom line from a $40.2 million loss in the year-ago period, ended the third quarter of this year with 115,600 members, which was an 18% increase compared to the year-ago period. Meanwhile, total revenue was up nearly 27% to $456.7 million.
Alignment’s growth in Medicare Advantage comes during a period of unprecedented competition for seniors with much larger players like Humana, UnitedHealth Group, CVS Health’s Aetna health insurance unit, and an array of Blue Cross and Blue Shield plans also growing their health plans. More than half of the nation’s seniors eligible for Medicare are now choosing privatized Medicare Advantage plans.
Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines with some also offering vision, dental care and wellness programs. And in recent years, the Centers for Medicare & Medicaid Services has allowed Medicare Advantage plans to cover more supplemental benefits, adding to their popularity among seniors.
Though Alignment has yet to turn a profit, the company’s top executive said the health plan continues to perform well in a competitive market. Alignment became publicly traded on the Nasdaq in March of 2021.
“We delivered strong Q3 business results, surpassing guidance across all four of our key metrics and extending our streak of 11 consecutive robust quarters since our initial public offering,” said John Kao, founder and CEO of Alignment Healthcare. “These results underscore our ability to grow sustainably and set the benchmark for Medicare Advantage done right by prioritizing high-quality, affordable senior care. We’re excited to drive continued growth in 2024 and beyond as we remain focused on our strategic goals and objectives.”
Furthermore, higher government quality ratings and an improving bottom line for Alignment caused company management to increase its financial outlook for the rest of the year, raising year-end health plan membership projections to “117,600-118,600, indicating 20% growth year-over-year at the midpoint of the outlook range,” the company said.
“Alignment Healthcare’s third quarter results show we’re doing Medicare Advantage right,” Kao said. “It’s more than just numbers – it’s about service, quality and advocacy, backed by seven consecutive years of our largest MA contract achieving at least 4- out of 5-stars.”
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