Bright Health may sell its last health insurance business

Bright Health Group says it's exploring the sale of its Medicare Advantage health plan business in California, a move that would effectively end the company's run as a health insurer.

The Bloomington-based company announced the move Friday. It also disclosed lenders have extended a waiver to minimum liquidity requirements until June 30 as Bright Health seeks strategic alternatives for the troubled business.

Until the extension, Bright Health was facing an end-of-April deadline to raise more capital after revealing in March that it had failed to maintain the minimum liquidity required by a financing agreement.

"We have received inbound interest in Bright Health's California Medicare Advantage business, and given this, the board has decided to review strategic alternatives alongside other financial options," Manny Kadre, lead independent director of Bright Health's board of directors, said in a news release.

Selling the Medicare Advantage business would be the latest plot point in Bright Health's dramatic rise-and-fall story. The company was financed by Minnesota's largest-ever initial public offering of stock before it stumbled badly with claims processing and risk assessment problems in what was once a large business selling health plans for individuals.

Bright Health, selling through government-run health insurance exchanges, at one point had 970,000 individual market enrollees across 15 states. In October, the company announced it would exit the business entirely this year.

The company's second area of focus had been Medicare Advantage health plans, where seniors opt for government benefits through a private managed-care health insurer. Shortly after announcing the individual market exits, Bright Health disclosed that it would relinquish its Medicare Advantage plan in Florida — the company's only market other than California for selling the coverage.

The Medicare business in California has about 125,000 enrollees and is Bright Health's last remaining foothold in the health insurance market.

Proceeds from a sale "would substantially bolster the company's financial position and establish a strong foundation for long-term sustainable growth," Bright Health said Friday in a news release.

Outside of health insurance, Bright Health owns and operates a number of medical clinics that manage care for patients through "value-based care" contracts with other health insurers.

The new agreement with lenders means Bright Health "will be subject to additional cash flow, cash balance and other reporting requirements," the company said Friday in a regulatory filing.