Category Archives: Health Insurance Startups

Bright Health exits nine more states

Posted on by • Posted in Consumer-Centric, Consumerism, Digital Health, Dismal Performance, Disruption, Disruptive Technology, Health Insurance Startups, Information Technology, Initial Public Offering (IPO) • Leave a comment

https://mailchi.mp/4587dc321337/the-weekly-gist-october-14-2022?e=d1e747d2d8

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.

Insurtech Bright Health stumbles amid fast growth

Posted on by • Posted in Health Insurance Industry, Health Insurance Startups, Insurtech • Leave a comment
https://us17.campaign-archive.com/?e=d1e747d2d8&u=526c5e99ee0439b6f83f7c051&id=fb69e1299e

The Minneapolis-based insurer was fined $1M by the Colorado Department of Insurance for failing to complete basic health plan functions, including paying claims, communicating with members, and processing consumer payments. Bright claims its rapid growth, along with COVID-related challenges, contributed to its failures in the Colorado individual and family plan market, where it serves about 50,000 enrollees.

But there are also signs of other problems. After posting $1.2B in losses in 2021, Bright laid off five percent of its employees in March, and says it plans to exit the individual market in six states, which make up less than five percent of its revenue. Bright is instead focusing on integrating its provider arm, NeueHealth, into its insurance business in fast-growing markets like Texas, North Carolina, and Florida.  

The Gist: While Bright, along with other insurtechs, has garnered attention with promises of an enhanced customer experience and lower costs, its stumbles with basic health plan functions in Colorado may signal more systemic problems. This news could deter health systems and other providers from partnering with the insurer. 

After years of hype, most insurtechs still have minimal market share, and most have yet to turn a profit. Unless performance improves, it may not be long before Bright, Oscar, and others become acquisition targets for larger, more established players.