Earlier this year, Bright Health Group announced it will exit six insurance markets as its financial struggles mount.
Now, the insurtech has announced that it is axing its full lineup of plans on the Affordable Care Act's exchanges and cutting its Medicare Advantage (MA) offerings to two states for the 2023 plan year. The company said it plans to focus on its multipayer care model in markets where that is thriving and will have MA plans available in California and Florida for next year.
The move, Bright Health Group said, will enable the company to build a stable growth trajectory with less risk, putting it on a quicker path to profitability.
"This is not a decision we made lightly, but one we believe is in the best interest of progressing our mission and the next chapter of our continued story of transforming healthcare in America," Bright Health CEO Mike Mikan told investors on a call Tuesday morning.
Cutting back its insurance product, Bright said, significantly reduces the amount of regulated capital the company needs, and it expects the change to release $250 million in excess regulated capital if state regulators give their approval. The company said it will continue to provide services to members through the end of the year and that it will support members in the upcoming open enrollment windows to ensure they don't face breaks in coverage.
Mikan added on the investor call that value-based care models like Bright's have shown they can "deliver on the promise of better, more affordable healthcare." Putting a greater focus on the company's model allows it to expand the types of products and financing that can find success in a value-based approach.
In addition to the news that it would exit certain markets, Bright Health Group also said it has raised $175 million in funding that it can use to drive toward greater profitability.
The insurtech went public in June of last year, raising nearly $1 billion and setting a new high for insurance initial public offerings. The company reported a $1.2 billion loss for 2021 in its full-year earnings.
And while Bright is pivoting its focus, rivals in the insurtech space aren't giving up on the exchanges. Oscar Health CEO Mario Schlosser told Fierce Healthcare that the company is bullish on the individual market and that Bright's exit opens the door for "more opportunity to assert ourselves" in the space. He did acknowledge that the ACA market can be difficult to navigate, as risk adjustment is complicated and membership fluctuates.
"I think the market is in the most stable position it's been since the founding, and this should not distract from that," he said.