Alignment Healthcare Delivers 44% Year-Over-Year Membership Growth Following Significant Boost from AEP, Increasing Membership to 155,500
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Insights
The announcement by Alignment Healthcare, Inc. regarding a 44% increase in Alignment Health Plan membership and the reaffirmation of achieving adjusted EBITDA breakeven in 2024 is a significant indicator of the company's financial health and operational efficiency. The membership growth is a critical metric for investors as it directly correlates with revenue streams in the healthcare insurance sector. The projection of continued membership growth into 2024 suggests a robust sales and marketing strategy, possibly reflecting well on the company's customer acquisition and retention efforts.
Moreover, the company's disciplined approach, as evidenced by 11 straight quarters of meeting or exceeding financial guidance, instills confidence in its management's ability to forecast and deliver on financial targets. The adjusted EBITDA breakeven projection is particularly notable as it signals an approaching inflection point in profitability, a key consideration for long-term investors assessing the sustainability of the company's business model.
Competitive tailwinds mentioned may include favorable industry trends or strategic partnerships, such as those with Instacart and Walgreens, which could enhance market positioning and customer value proposition. However, investors should remain cognizant of the competitive landscape and regulatory changes that could impact future performance.
Alignment Healthcare's membership increase and the consistent 4-star or greater rating from the Centers for Medicare & Medicaid Services (CMS) underscore the company's competitive edge in the Medicare Advantage (MA) market. Customer satisfaction and quality ratings are essential in the MA space, as they often influence consumer choice and can impact reimbursement rates from CMS. The high ratings and the 'Best Insurance Company for MA' designation by U.S. News & World Report may contribute to the company's strong membership growth by enhancing its brand reputation.
The expansion into new markets, like Merced County and the total reach of 8.5 million Medicare-eligible adults in 53 markets, demonstrates aggressive growth strategy and market penetration efforts. This expansion, coupled with strategic alliances for increased coverage and convenience, indicates Alignment Healthcare's commitment to diversifying its service offerings and addressing the needs of a growing senior population.
It is important to analyze how these factors might affect market share and the competitive dynamics within the MA space, especially against larger, established players.
The healthcare industry, particularly Medicare Advantage, is highly sensitive to regulatory changes and quality metrics. Alignment Healthcare's 44% membership growth and the achievement of a 4-star CMS rating are indicative of the company's compliance with industry standards and its ability to navigate the complex regulatory environment effectively. These factors are critical in maintaining a favorable reimbursement scenario and can lead to higher profitability per member.
Alignment's strategic partnerships, like those with Instacart and Walgreens, suggest an innovative approach to healthcare delivery, aiming to increase convenience for its members. Such initiatives could potentially lead to better health outcomes and lower costs, which are pivotal in the value-based care model that Medicare Advantage plans are increasingly adopting.
Investors should consider the company's ability to maintain its quality ratings and manage care effectively, as these will be key drivers of its financial performance and its capacity to achieve the projected adjusted EBITDA breakeven in 2024.
Company provides year-end health plan membership guidance, strengthens conviction of path to adjusted EBITDA breakeven in 2024
ORANGE, Calif., Jan. 08, 2024 (GLOBE NEWSWIRE) -- Alignment Healthcare, Inc. (NASDAQ: ALHC), today announced that its Alignment Health Plan membership has increased by
“Alignment’s purpose-built Medicare Advantage (MA) platform gives us the visibility and control to serve seniors the right way,” said John Kao, founder and CEO of Alignment Healthcare. “This visibility and control have helped us improve stars, effectively manage care and create competitively advantaged products that led to the exceptional growth we achieved. Companies that prioritize happy and healthy members can indeed do well by doing good, and Alignment is proof of that.”
Additionally, the company expects to have 162,000 to 164,000 members by the end of 2024, based on its expectations for continued membership growth during the year.
With its strong membership growth, the company is reaffirming its expectation to achieve adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) breakeven in 2024.
“Our conviction to be adjusted EBITDA breakeven in 2024 is strengthened by Alignment’s product strategy, expected positive gross profit contributions from new membership, continued operating leverage and ongoing cohort improvement,” said Kao. “Furthermore, we believe we will have continued competitive tailwinds that bolster our outlook for 2025.”
Since going public in 2021, Alignment has displayed a disciplined approach to its business with 11 straight quarters of strong business results, having met or exceeded guidance across key financial metrics. Additional achievements for Alignment include earning 4- out of 5-star rating from the Centers for Medicare & Medicaid Services for 2024 in its California HMO, marking its seventh consecutive year as a 4-star or greater plan, being named a 2024 Best Insurance Company for MA in North Carolina by U.S. News & World Report for the second consecutive year (one of only three MA plans in the state to earn the U.S. News “Best” rankings badge) and attaining an impressive 4.9-star rating on Google.
“Our growth and accomplishments reflect that this is our breakout year and highlight how Alignment is the gold standard for MA done right,” continued Kao. “As we continue to expand, we will remain focused on delivering high-quality service and outcomes at a low cost and are poised to take advantage of competitive tailwinds.”
In 2024, Alignment expanded its service to Merced County, California, bringing its gold standard of MA to more seniors with a total reach of 8.5 million Medicare-eligible adults in 53 markets across Arizona, California, Florida, Nevada, North Carolina and Texas.1 Additionally, the company has signed new agreements with Instacart and Walgreens to offer more coverage and convenience for seniors in select markets.
To learn more, visit alignmenthealth.com.
About Alignment Health
Alignment Health is championing a new path in senior care that empowers members to age well and live their most vibrant lives. A consumer brand name of Alignment Healthcare (NASDAQ: ALHC), Alignment Health offers more than 50 benefits-rich, value-driven Medicare Advantage plans that serve 53 counties across six states. The company partners with nationally recognized and trusted local providers to deliver coordinated care, powered by its customized care model, 24/7 concierge care team and purpose-built technology, AVA®. Based in California, the company’s mission-focused team makes high-quality, low-cost care a reality for members every day. As it expands its offerings and grows its national footprint, Alignment upholds its core values of leading with a serving heart and putting the senior first. For more information, visit www.alignmenthealth.com.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are subject to risks and uncertainties and are based on assumptions that may prove to be inaccurate, which could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our ability to attract new members and enter new markets, including the need for certain governmental approvals; our ability to maintain a high rating for our plans on the Five Star Quality Rating System; our ability to develop and maintain satisfactory relationships with care providers that service our members; risks associated with being a government contractor; changes in laws and regulations applicable to our business model; risks related to our indebtedness, including the potential for rising interest rates; changes in market or industry conditions and receptivity to our technology and services; results of litigation or a security incident; the impact of shortages of qualified personnel and related increases in our labor costs; and the impact of COVID-19 on our business and results of operation. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our Annual Report on Form 10-K for the year ended December 31, 2022, and the other periodic reports we file with the SEC. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law.
Investor Contact
Harrison Zhuo
hzhuo@ahcusa.com
Media Contact
Priya Shah
mPR, Inc. for Alignment Healthcare
alignment@mpublicrelations.com
1 Centers for Medicare & Medicaid Services Medicare Advantage/Part D Contract and Enrollment Data, December 2023 MA State/County Penetration, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/MA-State-County-Penetration
FAQ
What is the total membership of Alignment Health Plan as of Jan. 1, 2024?
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What is the company's expectation regarding adjusted EBITDA breakeven?
What are some of the recognitions earned by Alignment Healthcare?
In which markets has Alignment Healthcare expanded its service in 2024?
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