FirstCarolinaCare Discontinuing Insurance Plans in 2026 - Insurance News | InsuranceNewsNet

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February 27, 2025 Newswires
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FirstCarolinaCare Discontinuing Insurance Plans in 2026

Staff ReportThe Pilot

Carle Health announced on Feb. 25 that subsidiaries Health Alliance and FirstCarolinaCare will cease operating all lines of business except Medicare Advantage on Jan. 1, 2026.

The health plans will maintain operations to support claims processing and meet ongoing business needs through the end of 2025, according to a statement.

"In recent years, the health insurance industry has changed dramatically, particularly for provider-owned insurers," read a statement. "Because of this, health plans, like Health Alliance and FirstCarolinaCare have struggled to achieve operational and financial efficiency."

According to the Robert Wood Johnson Foundation, only four of the 43 provider-sponsored health plans formed or acquired between 2010 and 2015 were profitable in 2015. Today, increased demand for technology and broad networks coupled with medical inflation, rising prescription drug costs, higher volumes of chronic medical conditions and more have placed a financial strain on the organizations.

FirstCarolinaCare joined Carle Health in 2020. FCC is a not-for-profit insurance company owned by FirstHealth of the Carolinas and the Illinois-based Carle Health. It offers Medicare and employer group plans.

Health Alliance has been a long-standing partner of Carle Health since 1989. Similar to FCC, it is a provider-owned insurance company covering approximately 230,000 commercial and Medicare Advantage members.

While the organizations have worked over the last few years to grow and overcome competitive disadvantages, they have been unable 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," said Carle Health President and CEO James C. Leonard, MD. "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."

In 2023, FCC moved its operations to a new office off U.S. 1 in Southern Pines from its former location on the FirstHealth hospital campus in Pinehurst. That office is in the complex behind the Sheetz gas station and convenience store.

"Carle Health and Health Alliance have been great partners over the past several years," said Mickey Foster, CEO of FirstHealth of the Carolinas in a statement. "As a minority owner of FirstCarolinaCare, we understand and support the decision by Carle Health. FirstHealth is a self-insured organization, therefore, we will begin the bid process for a new third-party administrator for group insurance for 2026."

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.

"Our vision for the future is clear as Carle Health reinforces our commitment to excellent clinical care," said Leonard. "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 remains available through the Hally/MyChart member platform beyond the end of the year.

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