Alignment Healthcare Thursday reported a net loss in its first quarter of $46.5 million as the provider of Medicare Advantage coverage to seniors experienced a 50% increase in health plan members.
Alignment ended the first quarter with 165,100 members, which boosted total revenue 43 percent to $628.6 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.
And like its larger rivals in the Medicare Advantage business and more seniors in its plans, Alignment’s medical expenses were way up at $573.2 million compared to $396.3 million in the year-ago period.
The higher medical expenses kept Alignment from turning a profit since the company was founded in 2013 with the company reporting a first quarter loss of $46.5 million, or 25 cents a share, compared to a loss of $37.3 million, or 20 cents a share in the first quarter of 2023.
But unlike some of its larger rivals, Alignment chief executive and founder John Kao said the company has “met or exceeded expectations across membership, revenue, adjusted gross profit and adjusted EBITDA, setting a solid foundation for achieving our full-year outlook.”
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.
“Building on last year’s momentum, we reported strong first-quarter business results that set the foundation for achieving our full-year outlook,” said Kao said. “While our membership grew 50.5% year-over-year – far surpassing the industry – we also met our profitability expectations. The combination of both strong growth and margin results speaks to the discipline of our team and the quality of our member engagement, clinical operating model and product offerings. By focusing on serving seniors the right way, Alignment Healthcare continues to exemplify Medicare Advantage done right.”
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.
