Health insurance startup Bright Health, led by a former UnitedHealthcare CEO, expanded its coverage to 12,000 members in Colorado during its first year of operation, CNBC reports.
Bright Health, which is backed by $240 million in venture funding, sells plans on Colorado's individual market. In coming months, the insurer plans to expand into other states, as well as into the lucrative Medicare Advantage market.
The health plan's current model only includes one partnership with Centennial, Colo.-based Centura Health. The tight relationship allows the insurer to better understand costs and quality, according to the report.
Bright Health's medical loss ratio, or how much it pays out in premiums compared to overhead costs, was surprisingly low for its first year: 87 percent. While the startup brought in $36 million in premium revenues last year, Bright Health lost about $18 million, CNBC reports. Bob Sheehy, Bright Health CEO and former CEO of UnitedHealthcare, said the losses reflected startup costs. He anticipates the costs will subside when Bright Health expands to other markets and widens its product portfolio.