Orange, Calif.-based Alignment Healthcare, Inc. just became the third startup insurer in recent months to go public. Banking on the strong value proposition of Medicare Advantage, Alignment said it already has a “national expansion strategy” that it will put into action next year, but some experts question whether the measured growth the insurer has achieved primarily in California can be duplicated in other markets. The insurer on March 25 announced the initial public offering of 27.2 million shares of its common stock at $18 per share and on March 26 was expected to begin trading on the Nasdaq Global Select Market under the symbol “ALHC.”

David Mandelbaum, a health care portfolio manager with Bleakley Financial Group, says the trend of insurer startups going public is most likely driven by pressure from the investors and bankers behind the companies. “The academic rationale is to raise capital to expand,” but the real reason is “the aligned interests who are all invested in the company are looking for liquidity,” Mandelbaum tells AIS Health.

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