Alignment Healthcare’s second quarter net income more than doubled to $36.6 million compared to the year ago period as costs of care for older adults in its Medicare Advantage plans eased, the company said July 30, 2026.
Alignment Healthcare
Alignment Healthcare’s second quarter net income more than doubled to $36.6 million compared to the year ago period as costs of care for older adults in its Medicare Advantage plans eased.
Like many of its rival health insurers, particularly those in the Medicare Advantage business, Alignment has been battling rising medical expenses from customers in its health plans.
Thursday’s Alignment second quarter earnings report reflected costs that are still high but the company’s medical benefit ratio, which is the percentage of premium revenue that goes toward medical costs, dropped to 86%. It was the second quarter in a row that Alignment’s medical benefit ratio dropped.
“Medical benefits ratio based on adjusted gross profit was 86.3%, an improvement of approximately 40 basis points year-over-year,” the company said in its earnings report.
Medicare Advantage plans contract with the federal government to provide coverage available in traditional Medicare plus extra benefits and services to seniors, such as disease management, drug coverage and nurse help hotlines with some also offering vision, dental care and wellness programs.
But medical loss ratios have risen to 90% and above for several health insurance companies as claims pile up from doctors and hospitals seeing an influx of patients with a pent-up demand for medical care, particularly in the Medicare Advantage business. The industry would prefer such ratios to be below 90% and into the mid 80s, where the industry was less than two years ago.
Alignment’s results beat Wall Street’s earnings expectations.
The improving medical lost ratio and related cost picture helped Alignment’s net income more than double to $36.56 million, or 17 cents a share, compared to $15.65 million, or 7 cents a share in the second quarter of last year.
Alignment’s total revenue was up more than 31% to $1.3 billion in the second quarter compared to the year-ago quarter thanks to big growth in Medicare Advantage plan membership. The health plan ended the second quarter with 294,100 members, which was up 31% compared to last year.
“Our second quarter results underscore the strength of our purpose-built Medicare Advantage platform and place us in a strong position to deliver upon our full-year objectives,” said Alignment chairman and chief executive officer John Kao. “We are continuing to realize the benefits of ongoing investments we have made across our clinical model, AI-enabled capabilities and operational infrastructure. These financial results are a reflection of how we are delivering for our seniors and demonstrate that better outcomes, stronger member experiences and sustainable profitable growth can all go hand in hand.”
Leave a comment