Bright Health hasn't made full payment on its risk adjustment obligations to the federal government and is entering into a repayment plan with health insurance regulators.

The Bloomington-based company announced Tuesday that it will pay the balance owed — about $380 million — over the next 18 months, drawing on proceeds from an expected sale of its Medicare health plan business in California.

The agreement is Bright Health's latest financial maneuver to survive its exit from health insurance which was once its primary business that fueled rapid growth and then enormous losses.

As of last week, Bright Health had paid about $1.5 billion, or roughly 80%, of its risk adjustment obligation for 2022, but the full amount was due in mid-September, according to the federal Centers for Medicare & Medicaid Services (CMS).

"The principal amount of the repayment agreements is due in 18 months and bears interest at 11.5%," the company said Tuesday in a news release. "The company intends to use a portion of the proceeds from the pending sale of its California Medicare Advantage business to pay any remaining amounts due under the repayment agreements."

Bright Health went public in June 2021, in the largest-ever initial public offering by a Minnesota company. Almost immediately, the company stumbled badly by wrongly estimating risk adjustment payments to the federal government and mishandling claims for its subscribers.

Following a year's worth of crippling losses, Bright Health told regulators in August 2022, there was "substantial doubt" it could continue as a going concern without raising more capital.

In October 2022, the company announced it would exit all 15 states where it sold health insurance policies to individuals — by far its largest business at the time.

In the individual market, insurers must assess the relative health of their enrollees to calculate whether companies are required to make risk adjustment payments to the Centers for Medicare & Medicaid Services. That federal agency then redistributes the collected funds to health insurers in the market that cover higher-risk patients with more health problems.

The financial transfers are meant to stop health insurers from trying to profit simply by cherry picking healthy enrollees.

Bright Health no longer sells individual health insurance policies, but calculations for last year's risk adjustment transfers weren't finalized until late June. Bright Health and other companies with risk adjustment obligations were supposed to make full payment by mid-September, CMS said in a statement to the Star Tribune.

In an email to the Star Tribune, the federal government said it's working with state regulators to distribute collections from Bright to insurers that are owed money for risk adjustment. Payments are expected in mid-November.

The repayment plan announced Tuesday "just formalizes what we already knew — Bright Health lacked the capital to meet its federal obligations and has entered into a repayment agreement with the government," said Ari Gottlieb, a healthcare strategist.

Gottlieb, who has been closely tracking Bright Health's troubles, calls this more "high-cost capital" for a company that has raised or borrowed more than $4.2 billion.

The plan includes $45 million more in annual interest expense, Gottlieb said, which "shows what a tenuous path the company has to surviving in the long-term."

In a regulatory filing Tuesday, Bright Health said, "Failure to make payments in accordance with the repayment agreements, or entering into liquidation, rehabilitation, or early pre-liquidation, will result in a default under the repayment agreements, in which event the full balance of the amount owed under the repayment agreements will become immediately due and payable."

Bright Health raised $924 million with its IPO in June 2021. By December of that year, the company needed to raise more money — $750 million, including a large strategic investment from a subsidiary of Cigna Corp., one of the nation's largest health insurers.

In March, Bright Health disclosed that it again needed to raise money after breaching the minimum liquidity covenant on a financing agreement. The news came just before a regulatory filing showed the company paid about $3.77 million for 2022 in bonuses to top executives.

Bright Health announced in August that an existing investor had provided a $60 million loan.

Without a health insurance business, Bright Health is now focused on running a number of company-owned medical clinics in the south. It also administers "value-based care" contracts that the company's clinics and other medical groups enter into with health insurers or the federal government.