Thousands of Seniors Could Lose Their Medicare Advantage Plan After a Deal Collapsed

Medicare Advantage plans help millions of seniors save money in retirement, but after a collapsed negotiation, some seniors may need to find new plans for 2027. 

Providence Health Plan had been working to reach a deal that would have let current members continue their Medicare Advantage coverage in 2027, but the deal fell through, underscoring a trend that's affecting many insurance providers.

Here's what you should know about whether you're affected and how the trend might impact other insurance companies and Medicare Advantage enrollees.

The Providence Health Plan closure

Providence Health Plan covers approximately 440,000 people in western states and has been in operation for more than 40 years. When the insurer faced challenges such as increased medical spending and regulatory overhead, it announced in May that it wouldn't be offering individual and family plans in 2027, and that it wouldn't be renewing employer group plans. Reportedly, the health plan lost more than $100 million in 2025.

The insurer sought to sell its Medicaid plans and was negotiating a deal with a national insurer to continue Medicare Advantage coverage in 2027. Providence was unable to reach a deal, resulting in the closure of its Medicare Advantage plans, too.

"Despite significant effort on all sides, we were unable to reach an agreement on a sale. We are in discussion with regulators about this development and the broader wind-down of Providence's health plan operations," a Providence spokesperson said to Healthcare Finance News. "We will share more details with our members and the public as we are able under applicable regulations."

Who may be affected by the closure

Who may be affected by the closure

As a result of the deal falling through, 64,000 Medicare Advantage enrollees may lose their insurance plans. The closure also affects more than 260,000 commercial Providence Health members, although what happens to their coverage in 2027 depends on their type of plan. Providence says individual, family, and small-group plans will end after 2026, while some employer plans may continue into 2027.

Medicaid members will continue to be covered by Health Share of Oregon CCO while Providence evaluates its role in the Medicaid program for 2027.

Overall, Providence Health Plan serves about 440,000 members across its plans, meaning the closure and wind-down could affect hundreds of thousands of people.

When the change takes place

Providence insurance coverage continues through the end of 2026, so all enrollees maintain their coverage for the time being. However, that coverage ends in 2027, meaning affected enrollees need to explore and select a new Medicare Advantage plan or return to Original Medicare before 2027.

That may be a time-consuming process. It's essential to choose a Medicare Advantage plan that's the right fit for an individual's needs, so retirees need to take time to check that a plan covers the doctors and hospitals and prescriptions they're likely to use or need. Retirees also need to consider factors like premiums, copayments, and benefits to evaluate how a new plan compares to their old coverage and whether it's the best fit for them.

The broader trend of insurer exits

Providence Health Plan is just one of many health insurance providers that have recently exited the industry. CVS's Aetna left the 2026 ACA exchange, and Cigna left the ACA and Medicare Advantage markets. This year, Baylor Scott & White is leaving the Medicaid and ACA systems.

Several businesses are leaving state systems, as well. Centene is leaving the Arkansas Medicaid expansion program and the ACA in New Hampshire. CareSource is leaving the Indiana, Ohio, and West Virginia ACA. Additionally, Medica has announced the discontinuation of ACA plans in three states, and Elevance is leaving Ohio small group exchanges.

What's driving the insurer exits

Many companies are feeling the same financial pressure that prompted Providence to leave the insurance industry. Rising costs are making it more difficult to keep plans profitable long-term, and there's increased competition from larger insurers, too. 

According to Healthcare Finance News, in 2025, 72% of regional nonprofit insurers reported an operating loss, an increase from 57% in 2023. As a result, many companies that once offered Medicare Advantage plans are choosing to discontinue those plans, prompting enrollees to seek out alternative coverage.

The shift could impact enrollees in other ways, too. As more insurers exit, competition should decline, and prices may rise as insurers work to keep up with increased health care expenses. Insurers may pass along those expenses to enrollees through increased premiums and/or reduced benefits. The exit of so many companies could potentially signal the beginning of a shift in the Medicare Advantage coverage available.

Next steps for enrollees

Providence Health Plan encouraged its enrollees to consult an insurance agent or research other health plans before the Medicare annual enrollment period, which runs from October 15 through December 7. 

During open enrollment, you may join, drop, or switch to another Medicare Advantage Plan. You may also switch from a Medicare Advantage Plan to Original Medicare.

Bottom line

Though returning to Original Medicare may be an option, it could be more difficult than it looks. After an initial Medicare enrollment window, enrollees lose their guaranteed right to buy a Medigap plan without medical underwriting. During the underwriting process, an insurance company could deny you coverage or charge higher premiums because of your preexisting conditions. You might find that it's more affordable to choose another Medicare Advantage plan.

Shopping for a new plan may be complicated, so be sure to start the process early to find the best coverage and avoid the costly financial mistakes that could come with choosing the wrong plan.

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