Medicare Advantage Startup Alignment Joins IPO Trend

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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Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. In addition to her role as managing editor of Radar on Medicare Advantage, she oversees AIS Health’s publications and manages the health editorial staff. She graduated from Vassar College with a B.A. in English.

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