Bright Health Group will end individual and family health insurance coverage and reduce its Medicare Advantage coverage to just two states, steps that will cut its revenue in half.
The moves, announced Tuesday, represent a dramatic retreat for the Bloomington, Minnesota-based company that built a national presence in just five years.
After attracting billions of dollars in investment capital, Bright Health’s fast growth created the need to meet greater regulatory reserve requirements. Coupled with pandemic-related payouts, the company reported huge financial losses. Executives said the restructuring would ease those pressures and bring stability.
“We would expect to see much greater predictability in our revenue and growth margins,” Mike Mikan, the company’s chief executive, told investors in a conference call.
Bright Health currently sells coverage on government-run exchanges in 15 states. But it said it will no longer offer coverage in any of them beginning in January, effectively mothballing that line of business.
Bright also announced it will withdraw Medicare Advantage plan offerings in four states, leaving only California and Florida.
The company will decamp in January from individual health insurance markets in Alabama, Arizona, Colorado, Florida, Georgia, Nebraska, North Carolina, Texas and Tennessee—extending the previously announced withdrawal from Illinois, New Mexico, Oklahoma, South Carolina, Utah and Virginia . In a document footnote, Bright said there is a chance it may continue some individual plan coverage in California.
It is unclear how the downsizing will affect its employee base. The company did not respond to a request for comment.
Bright Health said it will now focus on its non-insurance business. The company operates medical clinics that will be a part of its “fully aligned care model,” which integrates data and analytics. This model aims to deliver better value for aging and underserved patients in the