Bright Health Weighs Sale of Medicare Advantage Business
Bright Health Group appears set to sever its last remaining tie to the health insurance business.
On Friday, the Bloomington-based company said it was “exploring strategic options for its California Medicare Advantage business … with a focus on a potential sale.”
For all intents and purposes, Bright had already ended the majority of its health insurance offerings at the end of 2022, when it pulled out of the market for insurance plans sold on government-run exchanges. At the time, the company said it planned to shift focus to its primary care offerings and its Medicare Advantage businesses in California and Florida.
Medicare Advantage is basically government-backed health insurance managed by a private company, and has been considered a lucrative business by many firms.
In a news release, Bright’s lead independent board director Manny Kadre noted that the company has already received “inbound interest” in its California Medicare business.
“Bright Health’s California Medicare Advantage business is strong and uniquely positioned to deliver culturally competent, localized care to nearly 125,000 aging and underserved consumers in California,” Kadre said. “Throughout this process, we are committed to enhancing value for all stakeholders and remaining true to Bright Health’s mission of making health care right, together.”
Bright first entered the California market through its acquisition of a Medicare Advantage company in early 2020. Bright went on to acquire a second California Medicare company a year later.
In Friday’s announcement, Bright also noted that it “has extended a waiver and amendment to its credit facility through June 30.” That would prevent the company from defaulting on money owed to lenders.
Ari Gottlieb, an independent health care business analyst with Chicago-based A2 Strategy Corp., wasn’t at all surprised by Bright’s latest announcements. Bright’s California business has been the “most valuable asset in the company,” he noted. Proceeds from the sale could go to paying off some of Bright’s debt.
One of Minnesota’s most promising startups in recent history, Bright has continually struggled to turn a profit.