Health Alliance and FirstCarolinaCare, both subsidiaries of Carle Health, have announced they will exit all lines of business, including Medicare Advantage, by December 31, 2025, affecting approximately 30,000 Medicare beneficiaries across multiple states.
The decision marks the end of Health Alliance’s 45-year presence in the insurance market.
Here’s what you need to know.
What’s Happening
Health Alliance and FirstCarolinaCare will completely exit the insurance market by the end of 2025. Health Alliance, based in Champaign, Illinois, serves Medicare Advantage members in Illinois, Indiana, Iowa, and Ohio. FirstCarolinaCare, based in Southern Pines, North Carolina, serves members in North Carolina.
Coverage for current Medicare Advantage members remains unchanged through December 31, 2025. Members will need to select new coverage during Medicare’s Annual Enrollment Period (AEP), which runs from October 15th to December 7th.
According to company officials, approximately 30,000 Medicare Advantage plan members will be affected by this exit.
Why It Matters
Health Alliance and FirstCarolinaCare’s complete market exit highlights the unique pressures facing provider-owned health plans in today’s insurance landscape. The companies join a growing list of insurers exiting Medicare Advantage, including UnitedHealthcare, Humana, Samaritan Health Plans, and UCare.
The decision reflects several industry-wide challenges:
- Market dynamics and plan designs make it increasingly difficult for provider-owned health plans to remain sustainable
- Medical inflation and rising prescription drug costs
- Increased utilization of healthcare services
- Higher volumes of chronic medical conditions
- Increased demand for technology and broad provider networks
“Our decision to exit the insurance market comes at a time when market dynamics and plan designs have made it increasingly difficult for provider-owned health plans to remain sustainable,” said Dr. James Leonard, Carle Health president and CEO. “We’re proud of the service our health plans have delivered for decades, and especially proud to have connected people to the care they’ve trusted through every stage of life.“
What Are Medicare Advantage Plans?
Medicare Advantage (also called Medicare Part C) plans are an alternative to Original Medicare, offered by private insurers approved by Medicare. These plans often bundle:
- Hospital coverage (Part A)
- Medical coverage (Part B)
- Prescription drug coverage (Part D)
- Potential additional benefits such as dental, vision, or hearing
With Medicare Advantage, your coverage is administered by a private insurer rather than directly through the government. These companies receive payments from Medicare to provide your benefits.
It’s important to know that most Medicare Advantage plans operate with networks of doctors and hospitals, and some may require referrals to see specialists. However, they can offer lower monthly premiums and additional benefits that Original Medicare doesn’t include.
Medicare Advantage has grown significantly in popularity, with over 32 million beneficiaries enrolled in 2024, making up roughly 54% of all Medicare participants.
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