Providence to Fully Exit Insurance Business as MA Deal Fails

Providence plans to completely shut down Providence Health Plan after it could not reach a deal with a national insurer to operate its Medicare Advantage business, the health system told Becker's Hospital Review. "We are in discussion with regulators about this development and the broader wind-down of Providence's health plan operations," a spokesperson said, adding that more details would follow.

The move caps a difficult stretch for provider-owned insurance. Running a health plan requires scale, capital, and actuarial expertise that many hospital systems struggle to sustain, especially in Medicare Advantage. Rising medical costs, tighter federal payment and audit rules, and pressure on star ratings have squeezed margins across the program, prompting even large national insurers to trim MA offerings.

For Providence, exiting lets the system refocus on its core hospital and clinical operations. Members will need to find new coverage, and regulators will oversee an orderly wind-down. The decision signals that owning a payer is no longer a clear strategic win for many integrated systems.