A regional nonprofit health plan that has served the Pacific Northwest and California for more than four decades is closing for good. Providence Health Plan confirmed it is shutting down entirely after a last-ditch deal to keep its Medicare Advantage business alive fell apart, leaving more than 64,000 older adults needing to pick a new Medicare option before 2027.
Why the Medicare Advantage Sale Collapsed
Providence had already announced in May that it would wind down its individual, family and employer health plans for 2027, but at the time it said it was negotiating with an unnamed national insurer to keep its Medicare Advantage business running under new ownership. That negotiation has now failed. A Providence spokesperson told Healthcare Dive the agreement sputtered “despite significant effort on all sides,” and the insurer confirmed it is now talking with state regulators about winding down the rest of its health-plan business.
The insurance division had been the financial drag on an otherwise recovering health system. Providence’s health plan business lost more than $100 million in 2025, though those losses had narrowed sharply by mid-2026 as the parent system pursued a broader financial turnaround. The nonprofit, which operates 51 hospitals across the western United States, reported hundreds of millions of dollars in net income for the first half of 2026, a reversal credited largely to cutting mid-level management, reducing reliance on temporary agency staffing, and trimming underused services — gains that made the insurance division’s continued losses harder to justify keeping.
Providence began exploring a sale of its insurance business in March, and had already confirmed in May that it would stop offering individual and family health plans on and off the ACA exchanges for 2027 and would not renew employer group plans as their contracts came up. Its Medicaid plans remain up for sale separately, with an update expected later this year on whether that business will be sold or wound down as well.
What Happens to a Member Whose Plan Disappears
Members losing coverage because their insurer is exiting the market are not left with no coverage at all. A disenrolled member automatically reverts to Original Medicare, the government-run Parts A and B program covering hospital and medical care, though drug coverage and extra perks like dental or vision do not carry over automatically. Anyone in that position typically qualifies for a Special Enrollment Period, a roughly 60-day window to pick a new Medicare Advantage plan, add a stand-alone Part D drug plan, or apply for Medigap supplemental coverage without waiting for the standard fall enrollment window…