Startups, Payers

Bright Health expands to California with acquisition

The insurance startup reached a deal to acquire Brand New Day shortly after closing a $635 million funding round.

With $635 million in fresh funding, insurance startup Bright Health expanded to California with a new acquisition. The company reached a deal to acquire Brand New Day, a Westminster-based company that offers Medicare Advantages plans across the state.

Bright Health and Universal Care, the company that manages Brand New Day, announced they had reached an agreement on January 8. The companies did not disclose the terms of the deal, which is expected to close this year.

“This transaction gives Bright Health Plan a strong presence in California with an established and philosophically aligned partner,” Bright Health President and Vice Chairman Mike Mikan said in a news release. “But beyond that, it positions us to leverage this partnership to bring key elements of Brand New Day’s patient-first, integrated clinical model of care to all our members across product lines and geographies.”

After it was founded in 2016, Minneapolis-based Bright Health initially focused on offering narrow-network individual market plans. Since then, the company has found a growth opportunity in Medicare Advantage plans. With the new acquisition, Bright Health said it would serve a total of 200,000 members across 13 states. That’s up significantly from when it reported having 60,000 members in July.

Brand New Day was founded in 1983 and maintains a network of 7,300 primary care providers and 22,300 specialists. The company is led by Jeff and Jay Davis, both of whom will continue to head up local market operations under Bright Health. The startup said it would look to retain Brand New Day’s local expertise and clinical programs while bringing its own technology and leadership.

“We are impressed by Bright Health’s seasoned leadership, national scale and depth of expertise. And the speed with which they’ve grown demonstrates the strength of their consumer-focused healthcare model,” Brand New Day CEO Jeff Davis said in a news release. “We look forward to working alongside Bright Health leadership to deliver robust healthcare options to more consumers in California and beyond.”

 

Photo credit: Nuthawut Somsuk, Getty Images

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