Health Alliance and FirstCarolinaCare to exit Medicare Advantage market after 2025
May 30, 2025
Urbana, Ill. – Following prior announcements, Carle Health shared today they have concluded their comprehensive strategic and financial analysis and that Health Alliance and FirstCarolinaCare will exit all lines of business—including Medicare Advantage—by Dec. 31, 2025. This decision reflects the challenges facing provider-owned health plans in the current insurance and economic environment.
Coverage for current Medicare Advantage members remains unchanged through the end of the year, and Health Alliance/FirstCarolinaCare are focused on ensuring that member support and services continue uninterrupted.
“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 James C. Leonard, MD, Carle Health president and chief executive officer. “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. That legacy continues as Carle Health focuses our efforts on delivering exceptional care and positioning Carle Health for long-term strength and impact.”
Carle Health maintains relationships with various other Medicare Advantage plans. When it’s time to explore new coverage options, ChooseCarleHealth.org is available as a resource to help patients stay connected to their trusted care teams.
Regional individual and group insurance plans discontinuing in 2026
February 25, 2025
Urbana, Ill. – Carle Health today announced that as of Jan. 1, 2026, subsidiaries Health Alliance and FirstCarolinaCare will cease operating all lines of business except Medicare Advantage. Throughout the remainder of 2025, the health plans will maintain operations to support claims processing and meet ongoing business needs, regulatory mandates and contractual obligations.
Health Alliance has been a long-standing partner of Carle Health and its mission to serve patients and health plan members since 1989. FirstCarolinaCare joined the organization in 2020. In recent years, the health insurance industry has changed dramatically, particularly for provider-owned insurers. Because of this, health plans, like Health Alliance and FirstCarolinaCare have struggled to achieve operational and financial efficiency. Medical inflation, rising prescription drug costs, increased utilization of healthcare services, higher volumes of chronic medical conditions, coupled with an increased demand for technology and broad networks have placed considerable financial strain on those organizations.
While Health Alliance and FirstCarolinaCare have worked diligently over the past few years to grow to a size that might overcome these competitive disadvantages, they have not been able to reach a financially viable level to compete effectively in today’s environment.
“Our commitment to the communities we serve requires a constant evaluation of the organization so we can continue to set the standard of excellence in healthcare,” James C. Leonard, MD, Carle Health President and Chief Executive Officer said. “Carle Health has had to make decisions that enable us to better focus on our core services, built around the health and wellbeing of patients. We recognize that in today’s health insurance environment, our health plans no longer successfully compete and Carle Health must effectively utilize our resources to meet the changing needs of customers.”
The organization has begun communicating with employees, customers and impacted partners as they prepare for the changes in the coming months. Operational leaders are working to ensure all necessary regulatory requirements are met and to facilitate the adjustments necessary to continue serving members seamlessly through the calendar plan year.
“We are so grateful for the commitment of all the health plan employees who will continue to serve customers as we navigate this transition. They have consistently brought innovative solutions, unique programming and unmatched customer service to improve the health outcomes of those we serve for decades, and that impact is felt by members across the country.” Sinead Madigan, Health Alliance President said.
“Our vision for the future is clear as Carle Health reinforces our commitment to excellent clinical care,” Dr. Leonard said. “We are proud to have been a part of the health journey of countless individuals and families as we have served communities with medically informed health coverage for the past 40 years and will continue to earn the trust of patients and families as we move forward. Making the necessary decisions to safeguard our long-term viability is critical as we remain focused on being an enduring partner to the patients and communities we serve.”
Membership information will continue to be available through the Hally/MyChart member platform beyond the end of the year.