As Medicare benefits grow, health care losses shrink

Alignment Healthcare reported a third-quarter loss of $35 million on Thursday, even as the Medicare Advantage coverage startup grew its membership to more than 115,000.

Alignment, which improved its bottom line from a loss of $40.2 million this year, ended the third quarter of this year with 115,600 members, an 18 percent increase over last year. Meanwhile, total revenue was up 27 percent to $456.7 million.

The lineup growth in Medicare Advantage comes at a time of unprecedented competition for seniors, with big players like Humana, UnitedHealth Group, CVS Health’s Aetna health insurance unit, and Blue Cross and Blue Shield plans expanding their health plans. More than half of the nation’s seniors who are eligible for Medicare are now choosing private Medicare Advantage plans.

Medicare Advantage plans contract with the federal government to provide seniors with additional benefits and services, such as disease management and nurse helplines, and for some, vision, dental, and wellness programs. And in recent years, the Centers for Medicare and Medicaid Services has allowed Medicare Advantage plans to cover more additional benefits, increasing their popularity among seniors.

Although Alignment is not yet profitable, the company’s top executive said the health plan continues to perform well in a competitive market. Alignment will begin public trading on Nasdaq in March 2021.

“We delivered strong Q3 business results, outperformed guidance on all of our key metrics and extended our 11th straight quarter of strong growth,” said John Cao, Founder and CEO of Alignment Healthcare. “These results highlight our ability to grow sustainably and set the benchmark for Medicare Advantage by prioritizing high-quality, affordable senior care. We are excited to drive continued growth by focusing on our strategic goals and objectives through 2024 and beyond.”

In addition, higher government quality ratings and Allignment’s bottom line improvement led the company’s management to raise its financial outlook for the remainder of the year, raising its year-end health plan membership forecast to “117,600-118,600, representing 20 percent year-over-year growth — in the mid-point of the outlook range,” the company said.

“Alignment Healthcare’s third quarter results show that we are doing well with Medicare Advantage,” said Cao. “It’s about more than numbers – it’s about service, quality and advocacy, backed by a major MA contract for seven consecutive years achieving at least 4-out of 5-stars.”

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