Bright Health explores sale of California Medicare Advantage business
There is "inbound interest" in the California MA business, which is strong and serving 125,000 seniors, says board of directors.
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Bright Health Group is exploring a potential sale of its California Medicare Advantage business, the company has announced. Bright Health said it is exploring strategic alternatives for Brand New Day and Central Health Plan, its MA plans in the state.
There is "inbound interest" in the California MA business, which is strong and is serving 125,000 seniors, according to Manny Kadre, lead independent director of Bright Health's board of directors.
WHY THIS MATTERS
The company is trying to right-size its fiscal ship, as its financial struggles continue.
As of Monday morning, its stock was trading at $0.16 on the New York Stock Exchange.
Bright Health's financial situation is uncertain, with the recent sale of half of the CFO's stake in the company not being a good sign, Seeking Alpha said last month. There are questions over the company's ability to continue operating for the next year with its current cash reserves, the report said.
The proceeds of the sale of Bright Health's California MA plans would substantially bolster its financial position and establish a strong foundation for long-term sustainable growth, the company said.
Bright Health said it will continue to focus on capturing the shift to value-based, consumer-driven healthcare through its Consumer Care Delivery business, while working to wind down and exit its Affordable Care Act insurance business.
Bright Health has also announced that it has extended a waiver and amendment to its credit facility through June 30.
THE LARGER TREND
In October 2022, Bright Health Group announced it would no longer offer individual and family health plans through Bright HealthCare in 2023 and that it would be cutting Medicare Advantage products outside of California and Florida.
The cutback affected plans in Alabama, Arizona, Colorado, Florida, Georgia, Nebraska, North Carolina, Texas and Tennessee. The company had previously announced it would exit six markets: Illinois, New Mexico, Oklahoma, South Carolina, Utah and Virginia.
ON THE RECORD
Mike Mikan, president and CEO of Bright Health, said: "Since our founding, Bright Health has worked to make healthcare simpler, more personal and affordable for consumers. As our markets evolve, we are taking steps to adapt and ensure our businesses are best positioned for long-term success. In line with this, we see tremendous future growth opportunities in our Consumer Care Delivery business, which has performed well in the First Quarter, exceeding growth expectations and now serving approximately 375,000 value-based consumers. We look forward to continuing to drive differentiated results in this business as we focus on delivering better outcomes through value-driven healthcare."
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
