“Payviders” — health systems running their own health plans — are built on the promise of integrating care and bridging gaps between payers and providers. But, despite that compelling ethos, execution has been a challenge. In recent years, many health system-owned insurance plans have been scaling back the scope of their coverage.
Renton, Wash.-based Providence is the latest system to drop its insurance business, Providence Health Plan. While preparing to possibly operate its Medicare Advantage line with the support of an unnamed national insurer, the wind-down will affect 440,000 total members, of which more than 260,000 are commercial members and 58,000 are Medicaid enrollees.
The plan reported a $102 million net loss in 2025 as it faced steeper medical and pharmacy utilization, as well as a hit to MA star ratings. Providence Health Plan CEO Don Antonucci emphasized the importance of star ratings and reflective risk adjustment as regional plans work to stay afloat.
A handful of health plans planned to wind down operations leading up to 2026, including plans run by Urbana, Ill.-based Carle Health and Ann Arbor-based Michigan Medicine. Carle Health’s Health Alliance had more than 380,000 members, and FirstCarolinaCare — owned jointly with Pinehurst, N.C.-based FirstHealth of the Carolinas — had more than 15,000 members. U-M Health Plan had roughly 64,000 members.
Some system-owned plans have been contracting through enrollment pauses, job cuts and specific market exits. For example, Sentara Health Plans rolled back MA offerings this year. Baylor Scott & White Health Plan is leaving the Texas Medicaid managed care market by the end of August and will also stop offering ACA plans next year. In April, The Dallas Morning News reported the plan eliminated 321 jobs statewide.
Last year, HealthPartners left Minnesota’s Special Needs Basic Care Medicaid program, The Minnesota Star Tribune reported. It also paused enrollment in other Medicaid plans. However, HealthPartners said layoffs are not on the horizon, and the enrollment freeze has since ended.
“We’re not out of the woods, but we’ve got a number of initiatives underway from last year into this year that are enabling us to change the way we work and approach the work to find efficiencies,” Andrea Walsh, president and CEO of HealthPartners, previously told Becker’s. “At this point, I don’t anticipate us using layoffs as a lever to further improve financial performance.”
She said the team has to “make short-term financial decisions to ensure we can serve patients long term.”
But the situation looks different for other plans. In an attempt to lean into its health system roots, HAP — the insurance arm of Detroit-based Henry Ford Health — rebranded as Health Alliance Plan by Henry Ford Health in May.
“Our new name reflects the strength of a model we’ve built over decades — bringing coverage and care together in ways that help people access services more easily, navigate healthcare with less friction, achieve better outcomes and reduce the cost of care,” Margaret Anderson, the plan’s president, said.
Meanwhile, dealmaking has helped some provider-led health plans expand their footprint. In January, Fallon Health said it planned to join with Somerville-based Mass General Brigham Health Plan. Michigan-based Corewell Health’s insurance arm, Priority Health, has also grown with its purchase of Physicians Health Plan of Northern Indiana in 2024 and a finalized agreement with Group Health Cooperative of Eau Claire in 2026.
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