Providence Health Plan Reviews Next Steps for Medicare Advantage Business

The insurer said it will provide additional details to members when possible, in accordance with regulatory requirements.

Providence Health Plan said negotiations with another payer to sell its Medicare Advantage plans have fallen through, leaving the insurer in discussions with regulators as it prepares to wind down most of its health plan operations beginning in 2027.

“Despite significant effort on all sides, we were unable to reach an agreement on a sale,” Providence said in a statement. “We are in discussion with regulators about this development and the broader wind-down of Providence’s health plan operations.”

The insurer said it will provide additional details to members when possible, in accordance with regulatory requirements.

Providence had announced in May that it would exit most of its health insurance lines of business beginning in 2027 while pursuing an agreement with another payer to keep its Medicare Advantage coverage available beyond 2027.

At the time, Providence said it was “actively working on a potential new agreement” with another payer for its Medicare Advantage members. It was also exploring the possibility of transferring management of its Medicaid plan to another carrier, with a decision expected later in the year.

Providence said its 2026 benefits would continue to be honored and that it would maintain provider networks and contracts in place. The insurer also said it would continue paying claims through the end of 2026.

The Medicare Advantage sale was part of a broader review of Providence Health Plan that began in March, when the health system announced it was exploring strategic options, including a potential sale.

Providence said regional insurers such as Providence Health Plan face rising costs and increasing technology demands while lacking the scale of larger national payers. The health system also cited the cost of technology investments and the limited ability of a smaller plan to absorb cost pressures through other business lines.

Providence President and CEO Erik Wexler previously said the organization had determined that “the most responsible path forward is to exit most of our health insurance lines of business beginning in 2027.”

He said Providence would continue serving Medicare Advantage members through a new agreement with a national carrier and that the organization was working to finalize that agreement.

Providence has also been restructuring amid financial pressures, including consolidating or spinning off departments, reducing leadership positions and announcing multiple rounds of layoffs.

The health system said its hospitals and other provider facilities will continue to operate in 2027.

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