More health systems are choosing to scale back their insurance operations or get out of the business entirely.
Executives have cited rising medical costs, increasing regulatory demands and a desire to focus on clinical operations as reasons for ditching their health plans.
In April, Greensboro, N.C.,-based Cone Health bought Winston-Salem,N.C.-based Novant Health’s stake in HealthTeam Advantage, a Medicare Advantage plan. The plan expanded from seven North Carolina counties to 33 during the time Novant Health co-owned the plan.
In February, Champaign, Ill.-based Health Alliance, owned by Urbana, Ill.-based Carle Health, said it would wind down its individual and employer group plans at the end of 2025. It will continue to offer Medicare Advantage plans.
FirstCarolinaCare, which is jointly owned by Carle Health and Pinehurst, N.C.-based FirstHealth of the Carolinas, will also sunset its employer group plans at the end of 2025. The company will continue to offer Medicare Advantage.
The insurers cited rising medical costs and increasing demands for technology and broader networks as factors in their decision.
The insurance business has become “incredibly difficult,” Carle Health CEO Jim Leonard, MD, told The News-Gazette.
“The bigger you are, the more leverage you have. In the last five years, we’ve had [a] lot of difficulty making it because we’re too small,” Dr. Leonard said.
Bloomington, Minn.-based HealthPartners is also scaling back health plan operations in 2025. In April, the health plan exited Minnesota’s special needs Medicaid program, a change affecting 6,500 members, according to The Minnesota Star Tribune.
The system-owned health plan also paused enrollment in its other Medicaid plans through the end of 2025.
Other health systems have sold their health plans to larger entities, but Dr. Leonard told the News-Gazette competitors showed “little interest” in purchasing Health Alliance. The company has around 187,000 members in individual and employer group plans.
In January, Indianapolis-based Indiana University Health sold its health plan to Elevance Health’s Anthem Blue Cross and Blue Shield. The company did not disclose the financial terms of the deal.
The same month, a deal between Springfield, Mass.-based Baystate Health to sell its insurance subsidiary to Point32Health fell through. The $165 million deal was unanimously approved by both organizations and received approval from state insurance regulators.
A spokesperson for Baystate told Becker’s the system will take a few months to evaluate the position of its health plan.
In November, Alhambra, Calif.-based Astrana Health entered into a definitive agreement to acquire certain assets from Los Angeles-based Prospect Health System, including its health plan. Astrana Health will pay $745 million for the health system’s insurance business, medical groups, a 177-bed hospital and other assets.
Toledo, Ohio-based ProMedica sold its insurance subsidiary, Paramount Health, to Medical Mutual of Ohio in May 2024. Paramount Health has more than 77,000 members in Medicare Advantage, commercial, individual and short-term plans.
ProMedica CEO Arturo Polizzi said the system chose to divest its insurance business, as the system has “sharpened its focus on core health system operations.”
In 2023, Ascension Wisconsin also finalized a deal to sell all of its stake in Network Health to Milwaukee-based Froedtert Health. The Milwaukee-based system is now the sole owner of Network Health, which offers health plans in 23 Wisconsin counties.
Like Carle Health, other systems have chosen to close, rather than sell their health plans.
Farmers Branch, Texas-based Southwestern Health Resources shut down Care N’ Care, its Medicare Advantage plan, at the end of 2024. The company had 26,000 Medicare Advantage members, according to CMS enrollment data.
A Southwestern Health Resources spokesperson told Becker’s that Medicare Advantage plans are facing significant headwinds, including “challenging regulatory changes and increasing benefit utilization.”
Ann Arbor-based Michigan Medicine said in November it plans to discontinue its health plan at the end of 2025. The plan has experienced significant financial losses in the past few years, the system said in a message to members. The plan has more than 9,000 Medicare Advantage members, according to CMS.
Fredericksburg, Va.-based Mary Washington Healthcare closed its Medicare Advantage plan at the beginning of 2024. The primary reason for the closure was the exit of the plan’s third-party administrator, according to The Free Lance-Star. The plan had 2,600 enrollees.
Some health systems are still opting to enter or expand within the insurance space. UCLA Health launched its own Medicare Advantage plan in October 2024.
Editor’s note: This story was first published in February 2024. It was last updated in May 2025.
