We got a look at the 2019 plans for venture-backed health insurance startup Bright Health, which says it doubled its membership again

Lydia Ramsey

Apr 2, 2019, 19:49 IST

We got a look at the 2019 plans for venture-backed health insurance startup Bright Health, which says it doubled its membership again

Courtesy Bright Health

Bright Health founders Bob Sheehy, Tom Valdivia, and Kyle Rolfing.

Bright Health, the Minneapolis-based health insurance startup that provides health plans for individuals, families and to seniors, made $145 million in gross revenues in 2018, its second year offering health plans.
According to state filings, Bright lost $17.5 million in 2018, the same as in 2017. At the same time, it doubled its membership base from 12,000 to more than 24,000.
Bright Health CEO Bob Sheehy told Business Insider the company expects to jump to around $400 million in revenue for 2019 and has signed on more than 60,000 members.

Venture-backed health insurer Bright Health managed to double its members while holding losses steady as it grew in its second year of offering health plans.

Founded in 2016, Bright Health is a Minneapolis-based startup that provides health plans for individuals, families and to seniors, a product called Medicare Advantage. Bright's financial losses in 2018 were $17.5 million, the same as what the company lost in 2017, its first year offering plans

Bright said it generated $145 million in revenue in 2018, in line with the company's expectations, on the plans it operated in Colorado, Alabama, and Arizona. On a net basis, after factoring in risk adjustments, it revenues were $124 million.

At the same time, its membership base doubled from 12,000 members in 2017 to 24,379 in 2018. The company most recently raised $2oo million in November, and the company is valued at $950 million, according to PitchBook.

Going into 2019, the company anticipaties more growth. The company's geographic footprint has grown into three new states: New York, Tennessee, and Ohio. Bright Health CEO Bob Sheehy said the company anticipates premium revenue to jump to around $400 million in 2019, and the company has enrolled more than 60,000 members for 2019 - more than double the plan members for 2018. As of March, 3,858 of those were on the company's Medicare Advantage plans, according to federal data.

Pairing a health plan with a provider partner

Before founding Bright, Bob Sheehy was CEO of health insurer UnitedHealthcare, a job he retired from nine years ago. After that, he spent his time working with venture capital and private equity before noticing that two trends were coming to healthcare: Consumers were starting to make more decisions about their care and getting sensitive to how much it was going to cost them, and healthcare delivery was getting more organized. It led him and his cofounders to form Bright.

Bright's model is to work exclusively with one health system in each market - for instance, it's working with Mount Sinai Health System in New York. Bright offers these plans to individuals, families, and for seniors. The idea is that if it can be focused and work directly with a partner, it could make the care better and less expensive.

"We thought if we could align with a leading health system and physician groups, we could work together to improve the value that we bring to the consumer," Sheehy told Business Insider.

And it seems to be working.

Bright spends about 76% of the premiums it takes in from members on their medical care, otherwise known as a medical loss ratio. That frees up more of its premium revenue to invest in other aspects of the business.

Other health insurance startups like Oscar Health - which sold plans on the individual exchanges as well as to employers in 2018 - had a MLR of 80.5% for 2018. Clover Health, which sells Medicare Advantage plans had a MLR of 95% in 2018.

Sheehy said the company plans to announce its 2020 markets later this spring.