Bright Health enters pact with Molina to sell CA Medicare Advantage for $600M

Bright Health Group (BHG) announced that it has entered into a definitive agreement with Molina Healthcare (MOH), to sell its California Medicare Advantage business, Brand New Day and Central Health Plan, for a total purchase consideration of $600M. Upon closing, the proceeds of the sale will significantly strengthen Bright Health’s capital position. The company intends to use the proceeds to satisfy its obligations to its bank lenders with the remaining proceeds used towards liabilities in its discontinued ACA insurance business. Bright Health is also announcing that it has extended a waiver and amendment to its credit facility. As part of the agreement, Bright Health Group’s Consumer Care Delivery business will enter into a provider agreement with Molina to serve Medicaid and ACA Marketplace populations in Florida and Texas in 2024. The transaction is subject to regulatory approval and other closing conditions. The closing of the transaction is expected to occur by early 2024 and is not subject to a financing condition. Bright Health does not intend to comment or disclose further developments until the transaction is closed.