Bright Health Group Inc. said Monday a deal to sell its California Medicare Advantage plans originally valued for $600 million is now only worth $500 million.
The deal with Molina Healthcare is set to close "on or about" Jan. 1, according to a Monday regulatory filing from Bright.
California-based Molina issued a news release stating the purchase agreement had been amended on Wednesday but did not detail what drove the price reduction.
When the sale closes, Bright Health will exit from the health insurance business. It will continue to operate a group of clinics.
Ari Gottlieb, principal with Chicago-based A2 Strategy Corp., a health care consulting firm, said the deal is more complicated than it might appear.
The amendment to the agreement also calls for $110 million to be held in escrow, Gottlieb said. That means that Bright will receive $390 million when the deal closes.
"I do think this more tangibly calls Bright's future survival into question," Gottlieb said.
Releasing the escrow funds is contingent upon either completing the consolidation of Bright Health's Brand New Day and Central Health Plan Medicare businesses or securing an acceptable rating from the federal Centers for Medicare and Medicaid Services for contract year 2025.
