Alignment Healthcare Details Care-Management Growth Plan at JPM26

Chief Executive Officer John Kao said Alignment approaches Medicare Advantage primarily as a clinical care-management business, rather than an underwriting-driven model.

Alignment Healthcare executives outlined the company’s growth and profitability strategy at a JPMorgan healthcare services event, emphasizing a care-management-driven approach to Medicare Advantage and projecting continued membership expansion toward 300,000 members.

Chief Executive Officer John Kao said Alignment approaches Medicare Advantage primarily as a clinical care-management business, rather than an underwriting-driven model.

The company relies on data-driven risk stratification and its in-house “Care Anywhere” interdisciplinary team to focus on high-cost and high-risk members. The care team comprises approximately 450 staff and accounts for about 3% of premium revenue, according to the company.

Kao said the company’s model is designed to reduce avoidable medical costs, allowing savings to be redirected into benefits for members. He noted that Alignment’s denial rate is below 2%, citing a figure of 1.9%, positioning the company differently from industry peers that have relied on higher denial rates as a cost-control lever.

Alignment reported having more than 275,000 members across its Medicare Advantage plans and guided to nearly 300,000 members by the end of the year. The company estimates that reaching this scale would translate into approximately $4 billion in premium revenue. Kao said Alignment has grown at an average rate of around 30% annually over the past decade, with expansion accelerating outside California.

The company also highlighted improvements in plan quality. Alignment said 100% of its members are now enrolled in plans rated four stars or higher, a key metric tied to reimbursement and benefit flexibility in the Medicare Advantage program.

On financial performance, management said Alignment was break-even in 2024 and reaffirmed its 2025 guidance, which implies an adjusted EBITDA margin in the mid-2% range. Kao said medical benefit ratio (MBR) performance has remained stable despite rapid growth. He cited 58% membership growth in 2024, with only a modest increase in MBR, and said 2025 data through the third quarter showed MBR declining even as membership continued to rise. For the first quarter of 2025, Alignment reported 31% year-over-year membership growth.

Executives also addressed regulatory and reimbursement headwinds, including the phased implementation of the CMS Version 28 risk-adjustment model and changes to Medicare Part D. The company said it expects some benchmark rate relief beginning in 2027, which could support future margin expansion.

Alignment said it plans to continue scaling its care-management infrastructure while navigating near-term regulatory pressure and maintaining its focus on clinical outcomes and cost control within Medicare Advantage.

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