- Starting next year, Bright Health will no longer offer individual and family plans in Illinois, New Mexico, Oklahoma, South Carolina, Utah and Virginia, as the insurtech startup looks to pivot following hefty losses in 2021.
- Leaving those markets should have an immaterial impact on revenue in 2023, executives said last week, as the six states represent less than 5% of Bright's expected revenue this year.
- Bright, which went public in June last year, wants to refocus on growth in markets where it can have a bigger impact. Despite steady revenue growth, the seven-year-old startup lost almost $1.2 billion in 2021, almost five times its loss the year prior.
Tech-focused insurance upstarts vying for a slice of the trillion-dollar, highly concentrated insurance market like Bright, Oscar Health and Clover Health struggled during the coronavirus with medical costs, more vulnerable to COVID-19 headwinds than their larger, more diversified peers.
Following a series of disappointing financial releases closing out 2021, Minneapolis-based Bright's stock price has plunged amid the departure of two top executives, layoffs of about 5% of its workforce and a recent $1 million fine from Colorado's insurance department over operational issues at the insurer.
Leaving the six underperforming markets is meant to help the insurtech focus on growing its fully aligned care model in its 10 remaining individual and family plan states for 2023, Bright said in a release Thursday.
It should also help Bright build up its NeueHealth care delivery business, which provides care through 180 owned and affiliated clinics and is expected to make up a larger share of Bright's revenue in the future.
Bright also wants to continue expanding NeueHealth's relationships with third-party payers. In December, health insurer Cigna announced a $550 million investment in Bright, attracted by its clinical network as more insurers look to snap up doctor's groups and keep more care in-house.
Focusing on NeueHealth makes sense as Bright's other market-facing business, Bright HealthCare, which manages commercial and Medicare products covering roughly 727,000 lives in the U.S., continues to hemorrhage money.
Bright expects NeueHealth to contribute roughly a third of its expected $6.4 billion revenue in 2022. The forecast reflects upward of 50% growth from 2021, when Bright brought in about $4 billion in revenue. Despite the ongoing revenue growth, medical costs skyrocketed last year, spurring losses.
Management said at the J.P Morgan Healthcare conference in March they expect to become profitable by 2024.
The planned exodus from the six states won't change anything for members or providers this year, Bright said. The insurer plans to work to make sure all impacted members are transitioned to new plans during the next open enrollment cycle so there are no coverage interruptions.