Dive Brief:
- Bright Health is looking for a buyer for its Medicare Advantage health plan in California, a move that, if completed, would mean the end of the company as a health insurer.
- Bright said in a Friday statement that lenders have extended a waiver to minimum liability requirements until the end of June as the company looks for strategic alternatives for the business. Previously, Bright had until the end of April to raise more capital after failing to meet minimum liability requirements.
- Bright plans to focus on its NeueHealth consumer care delivery business, which manages patient care through value-based contracts with other payers. NeueHealth “has performed well” and exceeded growth expectations in the first quarter, the company said in the statement.
Dive Insight:
Bright Health went public in June 2021, raising $924 million in its initial public offering. Last summer, the insurer had 970,000 individual market enrollees and 120,000 MA members in 15 states. However, Bright’s business stumbled as risk assessment problems contributed to higher operating expenses later in 2021, leading the company to post wider losses.
Bright said in October it would exit the ACA exchanges entirely to focus on the more lucrative MA markets. Shortly after announcing the ACA withdrawal, Bright also decided to leave its MA business in Florida. As a result, the company’s last MA insurance line was its MA plan in California — now up for sale.
“We have received inbound interest in Bright Health’s California Medicare Advantage business, and given this, the board has decided to review strategic alternatives alongside other financial options,” Manny Kadre, lead independent director of Bright Health’s board, said in the statement.
Bright’s California MA business includes about 125,000 enrollees.
Proceeds from a sale “would substantially bolster the company’s financial position and establish a strong foundation for long-term sustainable growth,” Bright said in the statement.
If that business is sold, Bright will be a standalone consumer-focused care business through NeueHealth, which provides care through 180 owned and affiliated clinics and is expected to make up a larger share of Bright’s revenue in the future. NeueHealth serves about 375,000 value-based consumers, according to Bright.
