Alignment Healthcare (ALHC): Largest contract drops below the 4-star Medicare bonus line
Alignment's main California Medicare Advantage contract fell to 3.5 stars from 4.0 in CMS's 2027 ratings, putting its 2028 quality bonus at risk. Shares sank about 20% on the news. It expects no 2026 or 2027 revenue hit and plans to appeal.
Why it matters Plans rated 4 stars or more earn bonus payments, and this one contract covers most of Alignment's members (reports say roughly 75-81%). The cost lands in 2028, and the company says provider risk-sharing should offset part of it.
What we verified TIKR and Stocktwits both report H3815 moving from 4.0 to 3.5 stars, six other contracts at 4 stars or higher, no expected 2026-27 revenue impact and a planned appeal and legal challenge. The membership share and the exact share-price move differ by outlet (about 20% to 23%, premarket versus after hours).
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