Moving healthcare closer to profitability as Medicare enrollment increases

Healthcare coordination A loss of $24 million was reported Thursday in the second quarter, when the provider of Medicare Advantage coverage for seniors, posted a 56% increase in health insurance enrollees, exceeding Wall Street analyst expectations.

Alignment ended the second quarter with 175,100 members, an increase of 56 percent compared to the same period last year. That increased total second-quarter revenue by 47 percent to $681.3 million.

The sales increase comes amid an intensely competitive market as the number of seniors enrolling in private Medicare Advantage plans reaches a record high, with more than half of eligible beneficiaries signing up for such privatized coverage. Meanwhile, Medicare Advantage plans are struggling this year as seniors with pent-up health care needs following the Covid-19 pandemic seek care and file claims with their health insurers.

Like its larger rivals in the Medicare Advantage sector, Alignment’s medical costs rose to $605 million in the second quarter, compared with $410 million in the same period a year ago.

Higher medical costs again prevented Alignment from posting its first profit since the company was founded in 2013, with the company reporting a second-quarter loss of $24 million, or 13 cents per share, compared to a loss of $28 .4 million, or 15 cents per share. share in the second quarter of 2023.

Alignment, which began publicly trading on the Nasdaq in 2021, has yet to predict exactly when the company will be profitable, but a company spokeswoman said they are “focused on profitability in 2025.”

“Alignment Healthcare is doing Medicare Advantage the right way and that is reflected in our industry-leading membership growth and revenue growth this quarter,” said Alignment Healthcare Founder and CEO John Kao. “We are thriving in our category with a model built on long-term sustainable growth as we serve more seniors nationwide, and we will continue to make significant investments to enhance our member experience, clinical outcomes and management of the improve medical costs.”