Bright Health Group closed a $175 million investment round as the health insurer struggled to stabilize its struggling financial situation.
Insurtech has sold 175,000 shares of Series B stock to support its new “centralized business,” the company announced Wednesday. Fundraising follows a strategic axis focuses solely on Medicare Advantage and patient care directly through a NeueHealth provider affiliate. Bright Health did not immediately respond to a request for an interview.
In January, Bright Health will withdraw from the individual health insurance market in Alabama, Colorado, Florida, Georgia, Nebraska, North Carolina, Texas and Tennessee after having announced withdrawals from Illinois, New Mexico, Oklahoma, South Carolina, Utah and Virginia. The company may continue to offer individual coverage in California. About 900,000 existing policyholders will need to switch service providers by 2023.
Bright Health hopes these exits will reduce costs and free up about $250 million in medical debt settlement. The company was founded in 2016 with a focus on health insurance exchanges.
The strategic axis follows many states say they are watching Bright Health’s financing comes after the company was asked to transfer nearly $150 million at the last minute to maintain compliance with state law on insurance reserves.
Bright Health has lost $431.9 million so far this year. In August, CEO Mike Mikan said the company would need raise capital from outside to maintain its business. Insurtech aims to break even on an adjusted basis of earnings before interest, taxes, depreciation and amortization by 2024.