Providence Health Plan recorded a $102 million net loss in 2025, driven by rising medical and pharmacy utilization and a drop to a 3.5 Medicare Advantage star rating, but the Oregon-based health plan is projecting a return to financial stability this year, CEO Don Antonucci told Becker’s.
“Like others in the payer industry, especially regionals, it was a difficult year for the health plan from a financial perspective,” Mr. Antonucci said. “We saw the same headwinds and challenges on the payer side, with utilization up for medical costs and pharmacy costs.”
He said the company, which posted $2.5 billion in revenue last year, moved aggressively more than a year ago to reposition itself using several levers, including a focus on restoring its historically high MA star ratings, exiting underperforming counties, repricing across its commercial lines of business and cutting administrative costs.
The star ratings effort has paid off. Providence Health Plan achieved four stars for 2026 revenue and again for 2027 revenue, a rebound Mr. Antonucci had previously flagged as a top priority. The plan also priced its small group market at a 20% increase for 2026, following a 15% increase the year prior.
After peaking at roughly 80,000 MA members in 2025, the insurer exited certain counties and restructured its product offerings, projecting enrollment would fall to about 51,000 members this year. Instead, it landed at around 65,000, with a concentration in markets with strong provider alignment such as the Portland metro area.
“It played out beyond expectations,” Mr. Antonucci said, crediting the plan’s brand reputation, its No. 1 ranking for MA in Oregon and Washington from U.S. News and World Report, and top marks from J.D. Power in member satisfaction.
Overall 2026 revenue is projected to remain roughly flat and membership down in some segments, largely because of the higher per-member revenue attached to its MA plans.
Mr. Antonucci’s experience tracks with what other regional and health system-owned MA plans reported during the annual enrollment period, as smaller plans with strong local provider relationships saw enrollment hold or grow beyond expectations while large national carriers pulled back amid rising costs. He views high star ratings and accurate risk coding as the baseline requirements for regional plan sustainability.
“You have to be a four-star-plus plan to make this sustainable moving forward if you’re a local plan,” he said. “And are you doing the right thing? Are you linking actual care to the population so that it can be appropriately reflected in risk adjustment, so that you’re getting the right reimbursement to pay for the right care for members? That’s it at the end of the day.”
His comments come as federal scrutiny of MA risk adjustment practices is intensifying. In January, Kaiser Permanente agreed to pay a record $556 million to resolve Justice Department allegations that it submitted invalid diagnosis codes to inflate MA payments. In late February, CMS notified Elevance Health of its intent to suspend enrollment into its MA plans, citing substantial and persistent noncompliance with risk adjustment data submission requirements.
On the 2027 advance rate notice from CMS, Mr. Antonucci said a near-flat increase during a period of rising utilization would ultimately shift pressure onto benefits and members if finalized as proposed.
“What ends up happening is that other plans then have to adjust benefits. So at the end of the day, it starts to fall to the actual member,” he said.
In January, Providence President and CEO Erik Wexler publicly called for a Medicare Advantage “reset,” citing a fourfold denial rate in MA compared to traditional Medicare and a 73% increase in payment denials and underpayments by commercial payers. Providence Clinical Network, which operates 15 hospitals in California, went out of network with UnitedHealthcare MA in January, mirroring a wider trend of network splits between large health systems and some MA carriers.
Mr. Antonucci, whose plan reimburses roughly 30% through Providence and 70% through other providers, said the answer to those tensions is pretty straightforward.
“What providers want is to be paid fairly and timely,” he said. “Let’s pay the claims timely, let’s pay them accurately, and let’s make sure that we’re partnering, because that’s the only way you win on star ratings and Medicare Advantage.”
The plan’s focus for the rest of the year comes down to three things: pricing benefits to remain financially viable, controlling cost of care and pharmacy spend, and improving administrative efficiency.
“It’s become much more difficult to plan three to five years out,” Mr. Antonucci said. “Let’s look at this year, execute, and set ourselves up for 2027.”
