Carle Health has announced that its subsidiaries Health Alliance and FirstCarolinaCare will cease operations for all lines of business except Medicare Advantage, effective January 1, 2026. The decision comes as a result of significant changes in the health insurance industry, particularly affecting provider-owned insurers.

Key Points

Reasons for Discontinuation:

• Dramatic changes in the health insurance industry
• Struggle to achieve operational and financial efficiency
• Medical inflation and rising prescription drug costs
• Increased utilization of healthcare services
• Higher volumes of chronic medical conditions
• Increased demand for technology and broad networks

Timeline and Transition:

• Announcement made on February 25, 2025
• Operations will continue throughout 2025 to support claims processing and meet ongoing business needs
• All lines of business except Medicare Advantage will cease on January 1, 2026

Impact on Stakeholders:

• The organization has begun communicating with employees, customers, and impacted partners
• Operational leaders are working to ensure regulatory requirements are met
• Efforts are being made to facilitate adjustments necessary for seamless service through the calendar plan year

Members will still have access to their information through the Hally/MyChart member platform beyond the end of the year.

This decision marks the end of a 40-year era of providing medically informed health coverage by Carle Health’s insurance subsidiaries, as the organization adapts to the evolving healthcare landscape.