Coming off a $1.2B net loss in 2021, Minneapolis-based insurtech Bright Health announced this week it will stop offering commercial and Medicare Advantage (MA) plans in all states except Florida and California, where it will solely offer MA plans. In its remaining markets, the company plans to focus on its care delivery and provider support business, NeueHealth. Bright has reportedly struggled to contain its medical spend, due to rapid growth and COVID-related costs; its claims processing backlog also earned a $1M fine from the Colorado Department of Insurance last April. Once valued at over $11B, Bright’s stock has lost 95 percent of its value since going public in June 2021.
The Gist: The largest digital health IPO to date is now rapidly shrinking, not even two years later—and Bright is not alone amongst its peers. After years of hype, most insurtechs still have minimal market share, and most have yet to turn a profit. With a market cap now under $1B—and dropping by the day—Bright could be an easy pickup for an established health plan interested in its consumer-centric technology, though given reports of dissatisfied beneficiaries, the value of that technology is still unclear.