Bright went public and raised billions alongside a rash of healthcare technology companies in 2021, but has since been shedding its insurance products and other assets as it looked to improve its flagging finances.
The company posted a net loss of $94.8 million in the first quarter of this year. In March, Bright said it had spent the $350 million available in its credit facility, violating its agreement with lenders, but that the bank had agreed to give it more time to return to minimum liquidity. Along with the sale announcement on Friday, Bright said it had once again received an extension on that time limit through the end of August.
In a statement, the insurtech said divesting its California MA plans will “significantly strengthen” its capital position, allowing it to satisfy obligations to bank lenders and use remaining funds toward liabilities in its ended Affordable Care Act marketplace business.
As part of the purchase, Bright is also entering a provider agreement with Molina to work with Medicaid and marketplace beneficiaries in Florida and Texas.
Meanwhile, Molina is facing upheaval in its Medicaid business as redeterminations continue, ending a period of continuous enrollment in the public insurance program during the COVID-19 public health emergency.
In April, the insurer said it expects half of the approximately 800,000 Medicaid enrollees it gained since the start of the pandemic will lose eligibility. CEO Joseph Zubretsky expects much of the impact will be felt in 2024.
Molina executives have said that winning or acquiring new contracts could offset losses from Medicaid redeterminations.
Molina already negotiated an expanded contract with California’s Medicaid program for 2024, and, Molina noted, the Bright deal accelerates the payer’s growth initiatives for dual special needs plans in the state.