Alignment Healthcare Tuesday reported a net loss in its fourth quarter of $47.2 million as the provider of Medicare Advantage coverage to seniors experienced a 21% increase in health plan members.
Alignment ended the fourth quarter of last year with 119,200 members, which was a 21% increase compared to the year-ago period. Meanwhile, total health premium revenue was up 27.5% to $459 million.
The revenue increase comes amid an intensely competitive market as the number of seniors enrolling in private Medicare Advantage plans hits an all-time high while more health insurers enter the market to sell such coverage. Of the nation’s seniors eligible for Medicare, slightly more than half are choosing Medicare Advantage, plans that 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 the company has yet to turn a profit, Alignment says it is able to compete with larger health insurers including CVS Health’s Aetna unit, Humana, UnitedHealth Group’s UnitedHealthcare and an array of Blue Cross and Blue Shield plans because its focus on quality and investing in technology to engage its members.
“Alignment Healthcare is Medicare Advantage done right,” said John Kao, founder and CEO, Alignment Healthcare. “We believe our clinically centric shared-risk model, supported by insights from our AVA technology, will thrive in the current Medicare Advantage environment. We expect that our member growth will outpace the industry, and we will gain market share by focusing on quality clinical outcomes, excellent member engagement and high-value benefits for our members.”
Alignment’s losses are narrowing somewhat with the fourth quarter loss slightly down from the fourth quarter of 2022 when the company lost $56.9 million. For the full year 2023, Alignment lost $148 million compared to a loss of $149.5 million in 2022. Revenue for 2023 was up 27% to $1.82 billion compared to $1.4 billion in 2022.
Alignment executives have said they expect this to be the year when the company nears profitability, saying last month they expect “to achieve adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) breakeven in 2024.”
“I am confident that the investments we have made to strengthen our visibility and control over medical costs and the member experience will continue to bolster growth in 2024 and beyond,” Kao said in a statement.