Providence will shut down most of its health insurance businesses in 2027 after decades in the market. The nonprofit health system said regulatory pressure, higher medical costs, and competition from national carriers have made the regional plan model too difficult to sustain.
The Renton, Washington-based system covers about 440,000 people across several western states. Starting next year, it will no longer offer Medicaid, Affordable Care Act, or employer-sponsored health plans.
Providence said the decision is part of a broader effort to strengthen its finances and refocus on care delivery. The system still plans to maintain its Medicare Advantage operations through a partnership with a national carrier.
Providence is one of the largest nonprofit health systems in the U.S. It has offered health coverage for years through Providence Health Plan and Providence Health Assurance.
CEO Erik Wexler told Oregon providers that changes in state and federal regulation have made it harder for regional nonprofit health plans to compete. He said Providence can no longer support both running a health plan and delivering care under current conditions.
Wexler also pointed to consolidation among larger insurers. National carriers now have more scale and resources, allowing them to operate more efficiently than regional plans.
Providence is looking for a buyer for its Medicaid plans. The system expects a final decision later this year.
The company will stop offering individual and family plans on ACA exchanges for 2027. It also will not renew employer group plans as contracts come up for renegotiation.
Providence wants to keep its Medicare Advantage business through a national carrier partnership. The system said that arrangement would allow current MA members to retain coverage in 2027.
The company did not name the carrier. Providence said it is still finalizing the agreement.
Providence first said in March that it was exploring a sale of its insurance division.
The move came as the nonprofit, which operates 51 hospitals across the western U.S., works to end a four-year run without an annual profit.
The system has faced staffing shortages, tariffs, inflation, and other cost pressures. Its insurance division has also weighed on financial results.
Providence’s health insurance business lost more than $100 mn in 2025, according to financial disclosures. In the quarter ended March 31, the insurance assets held for sale reported income of nearly $35 mn.
That income helped lift Providence’s overall quarterly gain. The system has cited recent momentum as evidence that its financial recovery efforts are moving in the right direction.
A Providence spokesperson did not provide details on expected sale proceeds or potential buyers. Final proceeds had not been determined as of May 11, when the system posted its latest financial results.
Regional health plans often carry strong local brand recognition. Healthcare Dive reported earlier this year that such plans could appeal to national carriers seeking new members and stronger local reputations.
