Molina Cuts Purchase Price of Bright Health's California Plans

Bright Health Group, Inc. suffered another blow on Dec. 13, when the foundering startup insurer revealed that Molina Healthcare, Inc. will pay less than originally planned for Bright’s California Medicare Advantage business. Molina now plans to pay $425 million for the California business, instead of the originally announced $510 million — a development that could complicate the ongoing liquidation of several Bright subsidiaries and its Affordable Care Act risk adjustment repayment agreement with CMS. 

According to a Molina press release from Dec. 18, “the purchase price for the transaction, net of certain tax benefits, is reduced from the previously announced $510 million to approximately $425 million, and now represents 23% of expected 2023 premium revenue of $1.8 billion.” Molina expects the deal, which it predicts will close “on or about January 1, 2024,” will add $1.00 per share “to new store embedded earnings” in the coming year.