Alignment Healthcare Tuesday reported a net loss in its third quarter of $26.4 million even as the startup provider of Medicare Advantage coverage to seniors experienced a nearly 58% increase in health plan members.
Alignment ended the third quarter with 182,300 members, which was a 57.7 percent increase compared to the year-ago period. That helped increase total revenue in the quarter nearly 62% to $692.4 million.
But like its larger rivals in the Medicare Advantage business, Alignment’s medical expenses jumped along with enrollment. Medical expenses in the third quarter eclipsed $613 million compared to just $397 million in the year-ago period.
Medicare Advantage plans have been struggling this year as seniors with a pent up demand for healthcare services following the Covid-19 pandemic seek care and submit claims to their health insurers. Already, UnitedHealth Group’s UnitedHealthcare health insurance business and CVS Health’s Aetna have disclosed third quarter financials with higher-than-expected medical expenses in their Medicare Advantage businesses.
Medicare Advantage plans contract with the federal government to provide traditional coverage available in traditional Medicare plus extra benefits and services to seniors, such as disease management and nurse help hotlines with some also offering vision, dental care and wellness programs.
In Alignment’s case, the higher medical expenses once again kept Alignment from turning its first profit since the company was founded in 2013 with the company reporting a third quarter loss of $26.4 million, or 14 cents a share, compared to a loss of $35 million, or 19 cents a share in the year ago quarter.
Alignment, which became publicly traded on the Nasdaq in 2021, has yet to project exactly when the company will be profitable, but a company spokeswoman said executives “are focused on profitability in 2025.”
Still, Alignment’s chief executive officer said the company has what it takes to be “successful in Medicare Advantage in the future.”
“Alignment Healthcare’s strong business performance once again highlights our differentiated ability to produce strong financial outcomes by focusing on a member-first philosophy,” Kao said in a statement. “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.”
