Total revenue in 2024 was more than $2.7 billion, up 48% year over year. Adjusted gross profit was $302.6 million, and the company’s net loss was $128 million, a decrease of 13.6%.
Becker’s sat down with Alignment CEO John Kao to discuss the major growth and how the company plans to reach at least 227,000 members by the end of 2025.
Question: Alignment Healthcare reported a 58% year-over-year increase in health plan members, reaching 189,100 by the end of 2024. What’s behind this growth?
John Kao: It started in 2023 when we worked hard on our star ratings, knowing that heading into 2024, we needed to submit our bids to CMS. By June 2023, we had an advantage, both in the announced star ratings and in risk adjustment. Our exposure to the V28 model was much lower than our competitors, which allowed us to be aggressive with our bid strategy.
At the same time, we knew our competitors were struggling with their star ratings and risk adjustment. As a result, they would also be challenged in medical management because many had globally capped contracts with sub-cap providers. We took a very precise, market-by-market approach to product design. Over the past decade, our strategy has been highly disciplined and organized. Unlike in 2021, when the market was growing rapidly and insurers were buying market share, we resisted that approach. We did not grow at all costs, instead remaining disciplined in 2021 and 2022.
When all of these factors converged in the marketplace, we timed it perfectly, which led to this outsized growth. What I’m most proud of is how we operationalized that growth. We onboarded members, took care of them, scaled our operations and clinical organizations, and maintained the same level of customer service throughout the year.
The root of all this is the premise that this business is about care management. You have to take care of people to be successful. That’s a key distinction from others in the industry, who view this as an underwriting insurance business.
Q: Total Medicare Advantage enrollment increased about 3% compared from 2024 to 2025, or the lowest growth rate in a decade. What does that suggest to you?
JK: That CMS made the right move. They want to return to the original intent of the Triple Aim — better clinical outcomes, higher-quality experiences, and affordable prices for beneficiaries. That’s what Medicare Advantage is about. The actions CMS took regarding star rating modifications and the introduction of V28 of the risk model were designed to push the industry away from financial engineering and back toward achieving the Triple Aim.
Our mission aligns with CMS’s goal of serving seniors. I don’t think we’ll see high single-digit or low double-digit growth in the next few years like we used to. The market is concentrated at the top. Five national players hold a significant share and they are shifting their focus from growth to margin expansion. That means they won’t be as aggressive in product design.
That said, I do believe that overall Medicare Advantage market share will continue to increase over the next five years. Even with a more compressed product strategy, the value proposition for members remains strong. Medicare Advantage plans still provide benefits that are $100 to $200 per member per month better than traditional Medicare.
The market is beginning to understand that we need to be high quality and low cost. It’s not just a tagline, it’s central to our operations. That’s why we’re going to keep taking market share while delivering a better experience for seniors.
