At least eight health systems are getting out of the insurance business.
Earlier this year, Springfield, Mass.-based Baystate Health reached a deal to sell Health New England to Point32Health for $165 million. Massachusetts regulators approved the deal Nov. 26. The acquisition is still awaiting approval from Connecticut regulators. Baystate Health has around 180,000 members in Medicare, Medicaid and commercial plans. Canton, Mass.-based Point32Health has more than 1 million members.
Other health systems are selling their smaller health plans to larger entities.
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.
In September, Indianapolis-based Indiana University Health said it plans to sell its insurance business to Elevance Health's Anthem Blue Cross and Blue Shield. The company did not disclose the financial terms of the deal. The sale is expected to close by the end of 2024.
Toledo, Ohio-based ProMedica sold its insurance subsidiary, Paramount Health, to Medical Mutual of Ohio in May. Paramount Health has more than 77,000 members in Medicare Advantage, commercial, individual and short-term plans.
ProMedica CEO Arturo Polizzi said in a Jan. 29 news release 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.
Other systems have chosen to close, rather than sell, their health plans.
Farmers Branch, Texas-based Southwestern Health Resources will shut down Care N' Care, its Medicare Advantage plan, at the end of the year. The company has around 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, per CMS.
Fredericksburg, Va.-based Mary Washington Healthcare closed its Medicare Advantage 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.
Editor's note: This story was published Feb. 16 and updated with additional details Nov. 28.