Bright Health, a start-up backed by $240 million in venture financing, thinks it has figured out how to make money in the complex world of health insurance.
Little has been shared about Bright's strategy, as it's still early days for the start-up. But a newly released state regulatory filing shows that the company grew to about 12,000 members in Colorado in its first year.
The real surprise: Its medical loss ratio for 2017 was 87 percent, meaning that the insurer paid out 13 percent less on medical claims than it collected in premiums. That is an achievement, and not just in comparison to other start-up plans. Investor Steve Kraus of Bessemer Venture Partners, who sits on the company's board, says the performance also stands out among plans from big traditional health insurers.
Bright's overall losses amounted to about $18 million, with revenues from premiums totaling $36 million.
Bright CEO Bob Sheehy, the former CEO of health system giant UnitedHealthcare, chalks up its losses to typical start-up costs, like engineering and marketing, which he claims will come down as the company scales to "multiple markets and products."
Kraus said revenues are projected to end the year at between $140 and $150 million, representing a 300 percent jump.