Bright Health Group, mired in financial crisis for months, must shutter its Texas subsidiary because it lacks the money to meet its obligations, a state court declared Wednesday.
The Travis County District Court in Austin placed Bright HealthCare Texas into receivership and ordered its liquidation. The insurtech, which is under regulatory pressure in multiple states because of financial shortfalls, was valued at $12 billion at the time of its initial public offering in 2021. The company all but abandoned the health insurance business in June, when it announced a deal to offload its final insurance asset to Molina Healthcare.
“Bright HealthCare Texas does not have admitted assets equal to its liabilities and has total adjusted capital less than that required under Texas Insurance Code,” the Texas Department of Insurance wrote in a public notice to policyholders Friday.
"The development in Texas does not impact Bright Health Group’s capital position or operations outside of Texas," a company spokesperson wrote in an email. "The company remains focused on the long-term sustainable growth of its continuing business, Consumer Care. Bright Health continues to work toward the approval of the sale of the company’s California Medicare Advantage business, and the company expects to close the transaction by the first quarter of 2024."
Bright Health's remaining business mostly consists of NeueHealth primary care clinics in Texas and Florida.
The company has been slowly pulling out of the health insurance market and announced plans for a full exit in April. Bright completed a reverse stock split in May to raise its share price above the minimum required to remain on the New York Stock Exchange.
Regulators in states such as Florida, Georgia and Texas have spent months monitoring the company. Bright Health owes $380.2 million in risk-adjustment payments to health insurance exchange carriers in Alabama, Colorado, Florida, Illinois, Nebraska, Texas, Oklahoma, Utah and Virginia, the Centers for Medicare and Medicaid Services announced in October.