Bright Health Group, Inc. (“Bright Health”) (NYSE: BHG) today announced its decision to further focus its business on its Fully Aligned Care Model and will no longer offer Individual and Family Plans through Bright HealthCare, or Medicare Advantage products outside of California and Florida in 2023. In addition, Bright Health announced raising $175 million of committed convertible preferred equity capital that is expected to close in the coming weeks and take the business through profitability.
Focusing on Bright Health’s largest healthcare markets where it operates its differentiated Fully Aligned Care Model in partnership with aligned external payors and care providers is a faster path to profitability, has greater predictability, and is more capital efficient. The company now expects to be profitable on an Adjusted EBITDA basis in 2023 and will serve underserved populations through its risk-bearing care delivery business, Medicare Advantage products, and the ACO REACH Program in states that cover 26% of the aging U.S. population. Further, given the continued solid performance year-to-date, Bright Health Group reaffirms its previous Adjusted EBITDA guidance for 2022 at the midpoint of the range.
“We have demonstrated the power of the Fully Aligned Care Model in serving aging and underserved populations and progressed the marketplace towards seeing the promise in value-based care across all populations,” said Mike Mikan, President and CEO, Bright Health Group. “The changes announced today give Bright Health a strong and stable platform for profitable growth at much lower risk. This is one more strategic step to building a differentiated and profitable business at scale.”
With this announcement, in addition to the previously announced market exits, Bright HealthCare will not offer Individual and Family health plans in Alabama, Arizona, Colorado, Florida, Georgia, Nebraska, North Carolina, Texas, and Tennessee after 2022(1), or Medicare Advantage plans outside of California and Florida. This focused footprint reduces Bright Health’s overall regulated capital need and is expected to release excess regulated capital of approximately $250 million upon settlement of all medical liabilities and approval from state regulators.
Bright HealthCare will continue to meet its obligations and service impacted members for the remainder of plan year 2022 and will work to support all impacted members in the move to new plans during the upcoming annual and open enrollment periods so that they do not experience any interruption in their coverage. Members enrolled in impacted plans will receive discontinuation letters, in the near future. For more information, visit https://brighthealthcare.com/markets.