Bright Health Founders as Other Insurtechs Work Toward Profitability

August 11

Three of the four startup “insurtech” health plans made progress toward profitability in the second quarter of 2023, according to Wall Street analysts and one health care industry insider. But Bright Health Group, Inc., the highly leveraged firm that is winding down its health plan operations, has significant liquidity problems, massive outstanding risk adjustment debt and may lose the lifeline of its deal to sell its remaining health plan assets to Molina Healthcare, Inc.

Bright Health is in the process of winding down all of its health insurance operations. The firm posted a net loss of $251 million in the second quarter.

On Aug. 7, two days before Bright’s quarterly earnings call, it secured a $60 million credit facility from one of its largest creditors, venture capital firm New Enterprise Associates (NEA). In a press release announcing the loan agreement, Bright added that it “has entered into a permanent waiver of default on its existing credit facility, which expires in February 2024.” That agreement, made with a consortium of banks led by JPMorgan Chase Co., extended Bright a $350 million line of credit earlier this year.

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Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.