Alignment Healthcare, a startup provider of Medicare Advantage coverage for seniors, recently reported a net loss of $26.4 million in the third quarter. Despite the loss, the company experienced a significant increase in health plan members, with a 57.7% growth compared to the previous year, bringing the total number of members to 182,300.
This surge in membership contributed to a nearly 62% increase in total revenue for Alignment Healthcare, reaching $692.4 million in the third quarter. However, like many other players in the Medicare Advantage sector, the company also saw a rise in medical expenses. Medical costs soared to over $613 million, up from $397 million in the same period last year.
The ongoing challenges faced by Medicare Advantage plans this year can be attributed to seniors seeking healthcare services post-Covid-19, leading to higher claims and expenses for health insurers. Alignment Healthcare is not alone in grappling with these issues, as industry giants like UnitedHealth Group and CVS Health’s Aetna have also reported increased medical expenses in their Medicare Advantage businesses.
Medicare Advantage plans offer additional benefits and services on top of traditional Medicare coverage, such as disease management and wellness programs. Alignment Healthcare, founded in 2013 and publicly traded on the Nasdaq since 2021, has yet to achieve profitability. The company reported a loss of $26.4 million in the third quarter, narrowing from $35 million in the same period last year. While profitability remains a goal, Alignment Healthcare aims to reach that milestone by 2025.
CEO Kao expressed confidence in the company’s future success in Medicare Advantage, emphasizing Alignment Healthcare’s member-focused approach and population health strategies. He stated, “Alignment Healthcare’s strong business performance once again highlights our differentiated ability to produce strong financial outcomes by focusing on a member-first philosophy. With all of the changes occurring in Medicare Advantage, we believe our population health approach is setting the standard for what is required to be successful in Medicare Advantage in the future. Alignment is Medicare Advantage done right.”
