Tiffany Yuan

Tiffany Yuan, on behalf of Andrew Mok, followed up on the advance notice, asking about Alignment Healthcare's exposure to the risk model rebasing component relative to the industry, given its limited exposure to unlinked chart reviews. She also requested clarification on the specific progression of Part D MLR through the quarters in 2025 and whether the expected 2026 slope would be consistent with that experience.

Answer

Founder and CEO John Kao stated that Alignment is less exposed to risk model rebasing than competitors due to its lower blended RAF scores (around 1.08-1.1), emphasizing that they have never relied on aggressive coding but rather on accurate and compliant practices, cost management, and star ratings. CFO Jim Head explained that 2026 Part D profitability would be slightly more weighted to the first half compared to 2025, primarily due to the construct of risk corridors and accruals, resulting in a generally similar but flatter slope.

Tiffany Yuan asked about Alignment Healthcare's exposure to the risk model rebasing component relative to the industry, given its limited exposure to unlinked chart reviews, and sought clarification on the progression of Part D MLR through 2025 and its consistency with the 2026 outlook.

Answer

CEO John Kao believes Alignment Healthcare is less exposed to risk model rebasing due to its lower blended RAF scores (below 1.1) compared to competitors, emphasizing the company's focus on cost management and Stars. CFO Jim Head stated that 2026 Part D profitability would be slightly more weighted to the first half, but generally similar to 2025 with a flatter slope.