Alignment Healthcare Lands $135 Million Investment To Grow Medicare Advantage

Bruce Japsen Senior Contributor Mar 4, 2020,9:00 am

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ASSOCIATED PRESS

Alignment Healthcare raised another $135 million as it expands deeper into new markets to sell its Medicare Advantage plans to seniors this year and beyond.

Alignment, which sells Medicare Advantage coverage in California and North Carolina doubled its California footprint this year by expanding into “eight greater Sacramento and Bay Area counties, where more than 862,000 Medicare recipients live,” the insurer said last fall.

Now, Alignment says it has new investors with Wednesday’s announcement that a $135 million round of funding is coming from Fidelity Investments, T. Rowe Price and Durable Capital Partners.

“The Series C round brings Alignment’s funding to-date to $375 million and will accelerate the growth of the company’s Medicare Advantage footprint while deepening its investments in its technology platform and plan offerings,” Alignment Healthcare said Wednesday.

The additional funding for Alignment will be needed as bigger well-capitalized health insurers selling Medicare Advantage are also expanding into new regions. Anthem, CVS Health’s Aetna health insurance unit, Cigna, Humana and UnitedHealth Group are expanding sales of Medicare Advantage plans into new states, counties and regions. Meanwhile, smaller companies like Alignment, several startups and new entrants including Bright Health and medical care provider plans are also expanding while some companies like Oscar Health, best known for sales of individual Obamacare coverage, began selling Medicare Advantage for the first time in 2020.

Founded in 2013, the privately held health insurance company known for its connections to high-ranking former U.S. health policymakers, eclipsed $800 million in sales in 2019 and is projecting growth for this year as well after adding more than 10,000 new Medicare advantage members. Alignment’s Medicare Advantage enrollment jumped 18% last year to 69,000 members as of Jan. 1, 2020 compared from 58,419 as of Jan. 1, 2019, the health insurer said.

“The growth we’ve since experienced is a testament to the impact our model is having in improving outcomes for seniors every day, and we look forward to continuing to advance and transform the health care experience,” Alignment Healthcare founder and chief executive John Kao said.

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