Alignment Healthcare posts loss as insurer expands Medicare benefit to new markets

Alignment Healthcare reported a loss of $40.2 million in the third quarter as startup provider of Medicare Advantage coverage spent money to expand coverage to new markets and further increase enrollment.

Alignment, which is selling its privatized Medicare Advantage plans in new markets for 2023, reported a loss of $40.2 million, or 22 cents per share, on Thursday, compared with $45.8 million, or 26 cents per share a year ago. one year old. Meanwhile, total revenue rose nearly 23% to $360.3 million from $293.5 million in the prior year quarter as health plan enrollment continues to decline. increase. Health plan membership at the end of the quarter was up 14% to 98,000 from the period a year ago.

“Alignment Healthcare’s strong performance in the third quarter is a testament to the repeatability and scalability of our operating model,” said John Kao, Founder and Chief Executive Officer of Alignment. “The quarter demonstrates how long-term, strategic investments in our people and our technology enable us to effectively deliver sustainable financial results in the markets we serve.”

Losses for a startup like Alignment are expected, especially in the highly competitive Medicare Advantage business. Health plans spend money to build networks of medical providers and related infrastructure to expand into new markets.

Medicare Advantage plans — owned by some of the biggest names in health insurance, including UnitedHealth Group, Aetna, Humana, and CVS Health’s Elevance Health — contract with the federal government to provide additional benefits and services to people elderly, such as managing illnesses and helping a nurse. helplines, some also offering vision, dental and wellness programs. And in recent years, the Centers for Medicare & Medicaid Services has enabled Medicare Advantage plans to cover more additional benefits, increasing their popularity with seniors and attracting investment and capital from a range of businesses, including including startups like Alignment.

Alignment announced earlier this year plans to expand into two new markets for 2023, launching Medicare Advantage in Florida and Texas.

Alignment, which became a publicly traded company last year in the popular and competitive Medicare Advantage business, said in June its expansion into Florida and Texas will also include launching plans “in additional counties in all four States where it currently operates”. Alignment already sells Medicare Advantage in four states: Arizona, California, Nevada and North Carolina.

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