Alignment Healthcare reported Thursday its second straight profitable quarter as a publicly traded company, in part by managing medical expenses better than many of its competitors that sell Medicare Advantage coverage to older adults.
Health Alignment
Alignment Healthcare reported its second consecutive profitable quarter as a publicly traded company, in part by managing medical expenses better than many of its competitors that sell Medicare Advantage coverage to older adults.
Alignment, which reported third-quarter net income of $3.7 million, watched its medical benefits ratio, which is the percentage of premium income that goes to medical expenses, falls to 87.2%. This compares to a medical benefits ratio of 88.4% in the previous quarter.
The improving financial performance of Alignment, which reported its first net income earlier this year in the company’s second quarterit comes as rival health insurers, particularly those active in Medicare Advantage, struggle to control costs. Medicare Advantage plans contract with the federal government to provide traditional coverage available in traditional Medicare plus additional benefits and services to seniors, such as disease management and nurse help lines, and some also offer vision, dental care, and wellness plans.
But those insurers in the Medicare Advantage industry have seen a spike in medical claims from an influx of patients seeking treatment they put off during the Covid-19 pandemic. The largest health insurers are seeing medical cost ratios of 90% or more and continue to struggle to manage their government subsidized patients.
Alignment’s net income was $3.7 million, or 2 cents per share, compared with a net loss of $26.4 million, or 14 cents per share, in the third quarter of 2024. Total revenue rose 43.5% to $993.7 million as the company continues to grow its Medicare Advantage membership.
Alignment’s total health plan memberships at the end of the third quarter rose nearly 26% to 228,600. Alignment sells Medicare Advantage plans in Arizona, California, Nevada, North Carolina and Texas.
“At Alignment Healthcare, we believe Medicare Advantage should be done right – and our third quarter results prove it can be,” said Alignment Healthcare Founder and CEO John Kao. “We deliver consistent performance by staying focused on what matters most: high-quality care, benefit stability and personalized support for seniors, including those with complex medical needs. As others fall short, we lean forward with confidence in our ability to grow, improve outcomes and remain a trusted Medicare solution for seniors in our markets.”
To be sure, Humana, UnitedHealthcare parent UnitedHealthcare and CVS Health’s Aetna health insurance unit are among the biggest players exiting some states and counties in 2026. Others, however, are entering new markets or keeping their existing geographic footprints, such as Alignment, which will continue to operate on Medicare5 by expanding its package of benefits4 to 68 from 56.
Health plans unveiled benefit options this month for its beginnings Enroll in Medicare Open, which started on October 15th and will run until December 7th.
