Bright Health to expand its Obamacare footprint in 9 new markets
Bright Health, the startup plan that partners with hospital systems to offer narrow network options on the exchanges, will expand into nine new markets including New York City.
The company announced the expansion on Wednesday, only a few weeks after the tech-focused startup Oscar Health disclosed its plan to enter six new markets. Both moves show an eagerness from the young venture capital-backed companies to nab their share of the Obamacare exchange markets. In the past month, other carriers also announced expansions even as rates continue to climb.
Bright Health relies on partnerships with major urban health systems to provide care for its enrollees. The company started on the Colorado exchange in 2016 with $80 million in seed money and a partnership with the Centura health system, then moved into Birmingham, Ala., and Phoenix. They followed their seed round with another $160 million raised in 2017.
Besides New York City, Bright Health will move into Tucson, Ariz., as well as Cincinnati, Springfield, Toledo and Youngstown in Ohio and Knoxville, Nashville and Memphis in Tennessee. Its overall reach will total 12 markets and six states. The company also sells Medicare Advantage and supplemental products.
Oscar Health also works through narrow networks but is technology-focused. Bright Health's operations depend on partnerships with major hospitals that essentially keep the plan enrollees within their medical system.
Both startups boast the efficiency and cost savings of their model, although so far their rates have largely reflected the broader individual market trends. Neither company has released proposed rates for 2019.
Oscar Health posted its first-ever quarterly profits in the first quarter of 2018, and Bright Health has yet to do so.
Bright Health co-founder Kyle Rolfing in April framed the attraction of the company's model for partner hospitals as offering an out from providers' often fraught negotiating tensions with traditional insurers. Essentially Bright Health offers the option of a provider-sponsored plan without shouldering the providers with all the risk, Rolfing said.
"The other thing that really intrigues hospitals is that many are looking at their own plans in order to control their own destiny, as they are at the whim of health plans today," Rolfing said. "That is a relationship fraught with a lot of issues and conflict. We are kind of getting out of that mode."
The company also wants to stand as an alternative to accountable care organizations because it works as an "exclusive provider organization" that keeps all its enrollees' medical treatment within one system. Rolfing said he thinks the model gives major hospitals more freedom to invest in population health, with better effect, than ACOs.
"You can have ACOs where only half the care is getting consumed at the health system those lives are attributed to," Rolfing said. "What good are the tools if you can't measure effectiveness? We create an environment where they can get the tools."
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.