Bright Health to sell California Medicare Advantage business to Molina for $600m

Bright Health Group, a technology-driven healthcare company, has agreed to sell its California Medicare Advantage business, including Brand New Day and Central Health Plan, to Molina Healthcare.

The deal, priced at a total of $600 million, is set to substantially strengthen Bright Health’s capital position.

With the completion of the sale, Bright Health plans to utilize the proceeds to meet its obligations to bank lenders. The remaining funds will be directed towards liabilities in its discontinued Affordable Care Act (ACA) insurance business. The company also revealed that it has extended a waiver and amendment to its credit facility.

A provider agreement will be established between Bright Health Group’s Consumer Care Delivery business and Molina Healthcare as part of the transaction. This agreement will allow for the servicing of Medicaid and ACA Marketplace populations in Florida and Texas starting in 2024.

Mike Mikan — Bright Health President and CEO said: “We are excited to enter into this agreement with Molina as it will allow Brand New Day and Central Health Plan to continue delivering localized, personal care to California consumers and will position Bright Health’s Consumer Care Delivery business for long-term success.

“The sale allows us to focus on driving differentiation and sustainable growth through our Consumer Care Delivery business.”

The transaction is subject to regulatory approval and other conditions for closure. The deal’s closing is anticipated to occur by early 2024 and is not reliant on a financing condition.