Bright Health Group is selling its California Medicare Advantage business for $600 million, a move that marks its complete exodus from the health insurance business.

California-based Molina Healthcare Inc., a Fortune 500 company, is the buyer.

Bright Health in April signaled it was considering a sale of its only remaining Medicare business.

The company said in a statement that the deal would "significantly strengthen Bright Health's capital position." With its history of large net losses, the company has been under consistent financial pressure to raise more capital and meet its loan obligations.

The company plans to use the proceeds to pay off loans as well as liabilities connected to its discontinued business of selling health insurance through exchanges.

"This takes some pressure off of them, but ... I don't think they're out of the woods yet," said Ari Gottlieb, principal with Chicago-based A2 Strategy Corp., a health care consulting firm. "You're left with a much smaller company" without the Medicare Advantage business.

In connection with the deal, Bright Health has negotiated another waiver extension with lenders.

The revised agreement gives the company a July 17 deadline to submit a term sheet outlining equity and debt to be used as bridge financing "to support the company's ongoing operating cash needs through December 31."

After going public in the largest-ever offering for a Minnesota company, Bright Health quickly expanded, peaking in 2021 with individual plans offered through health care exchanges in 15 states.

In October, Bright Health announced its exit from selling individual and family health insurance, which had been its core business. It also sold off its Medicare Advantage plan offerings in four of the six states it operated. By the spring, only California remained.

Bright Health still owns a group of primary care clinics.

"We look forward to further focusing on our value-based, consumer-driven care model. We see great potential to expand relationships with key payor partners as we continue to increase access to simpler, more personal, and affordable health care," Bright Health CEO Mike Mikan said in a statement.

As its business struggled, Bright Health laid off employees in several rounds of cuts at its Bloomington headquarters.

The business sale, which is subject to regulatory approval, is expected to close in early 2024.

According to the company's deal announcement, "Bright Health does not intend to comment or disclose further developments until the transaction is closed."

The buyer, Molina, reported revenue of $32 billion in 2022.

Molina is getting some tax benefits out of the deal. According to Molina's announcement the transaction is "approximately $510 million, net of certain tax benefits."

Beyond regulatory issues Molina said that the deal is contingent upon "the solvency and continued operation as a going concern of Bright Health Group throughout the pre-closing period."

In May, Bright Health sold Zipnosis, its telehealth business, to New York-based startup Florence. Terms of the deal were not disclosed. Bright Health had acquired Zipnosis, a Minneapolis-based startup, in 2021.