$950 million insurer Bright Health is plotting a massive expansion as startups look to reinvent how Americans get healthcare
- Minneapolis-based health insurance startup Bright Health is doubling its geographic footprint in 2020.
- By 2020, the company expects to be in 12 states, up from six in 2019.
- Bright offers insurance to individuals under the Affordable Care Act and coverage to seniors in Medicare Advantage, partnering with one health system in each market to help set up its insurance plan.
- Venture-backed health insurers Oscar Health and Devoted Health are also planning to expand in 2020.
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A three-year-old health insurance company is drastically expanding its presence in 2020, as startups flush with venture-capital cash look to reinvent the way healthcare is done in the US.
Minneapolis-based Bright Health, which provides health plans for individuals under the Affordable Care Act and to seniors in Medicare Advantage, will operate in parts of 12 states in 2020, roughly double its geographic footprint for 2019, the company said on Wednesday.
That'll include specific cities and counties in Florida, Illinois, North Carolina, Oklahoma, and South Carolina, and the whole state of Nebraska. It builds on Bright's presence in Alabama, Arizona, Colorado, Tennessee, Ohio, and New York.
Other venture-backed health insurers are also planning to expand. Earlier this month, New York-based startup Oscar Health said it plans to offer Medicare Advantage health plans in New York City and Houston in 2020. Oscar has also filed to be an insurer in at least three new states, though it hasn't yet announced its individual plan markets for 2020. Devoted Health, a Medicare Advantage insurer that started operating plans in Florida in 2019, has filed to be an insurer in Texas as well.
Business Insider previously reported on Bright Health's plans to expand into new states, based on regulatory filings and job postings.
Bright typically partners with one health system in each market to help set up its insurance plan. For instance, in New York, it's working with Mount Sinai Health System, and in Colorado, it partnered with Centura Health.
The idea is that by working directly with one health system in a region rather than contracting more broadly, Bright can make its members' care better and less expensive.
Here's a look at where Bright will have a presence in 2020, either via the individual market, the Medicare Advantage market, or both. The company declined to say which health systems it plans to partner with in its new cities and states.
Founded in 2016, the company has raised $441.7 million and has a valuation of $950 million, according to PitchBook.
Bright CEO Bob Sheehy told Business Insider that he attributes this to the markets' interest in the model, and that he anticipates a "strong growth pipeline" for 2021 and 2022. If anything, he said, he wishes he'd expanded more across the country earlier.
"There's a real need in the market place to come up with better solutions to serve consumers," Sheehy said.
In the first quarter of 2019, Bright Health generated $66 million in revenue and recorded $39.6 million of medical claims. The company posted a profit of $15.3 million for the period.
Sheehy said earlier this year that the company anticipates premium revenue to jump to about $400 million in 2019. As of the end of the first quarter, Bright had 65,886 members, the majority of which were in the company's individual and family plans.
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