Private Equity–Backed Insurers Are Failing Policyholders
Over a million people have lost their health insurance thanks to the failures of Friday Health Plans and Bright Health, two private equity–backed insurers — illustrating the risks of private equity moving into the already-unstable health insurance market.
The failure of private equity–backed insurers comes as private equity has massively expanded its footprint in the health care space. (E. Jason Wambsgans / Chicago Tribune / Tribune News Service via Getty Images)
The private equity–backed health insurer Friday Health Plans collapsed under order by Colorado state regulators on July 18, stranding thirty thousand policyholders without health insurance as of August 31 — forcing them to pursue new plans in the middle of the year and rendering the money they’ve already spent toward annual deductibles and out-of-pocket maximums moot.
The implosion of Friday Health Plans, which offered plans on seven state health insurance exchanges, comes as other private equity–backed insurers have faced similar issues. Bright Health, which was backed by private equity titan the Blackstone Group among others, had to end its insurance business on the exchanges last year, leaving hundreds of thousands of people to find new insurance policies for 2023.
In total, more than a million people have lost their health insurance thanks to the failures of the two private equity–backed insurers.
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