THE FOLLOWING IS A CARLE HEALTH RELEASE
Urbana, Ill. – Carle Health today announced that as of Jan. 1, 2026, subsidiaries Health Alliance and FirstCarolinaCare will cease operating all lines of business except Medicare Advantage. Throughout the remainder of 2025, the health plans will maintain operations to support claims processing and meet ongoing business needs, regulatory mandates and contractual obligations.
Health Alliance has been a long-standing partner of Carle Health and its mission to serve patients and health plan members since 1989. FirstCarolinaCare joined the organization in 2020. In recent years, the health insurance industry has changed dramatically, particularly for provider-owned insurers. Because of this, health plans, like Health Alliance and FirstCarolinaCare have struggled to achieve operational and financial efficiency. Medical inflation, rising prescription drug costs, increased utilization of healthcare services, higher volumes of chronic medical conditions, coupled with an increased demand for technology and broad networks have placed considerable financial strain on those organizations.
While Health Alliance and FirstCarolinaCare have worked diligently over the past few years to grow to a size that might overcome these competitive disadvantages, they have not been able 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,” James C. Leonard, MD, Carle Health President and Chief Executive Officer said. “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.”
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.
“We are so grateful for the commitment of all the health plan employees who will continue to serve customers as we navigate this transition. They have consistently brought innovative solutions, unique programming and unmatched customer service to improve the health outcomes of those we serve for decades, and that impact is felt by members across the country.” Sinead Madigan, Health Alliance President said.
“Our vision for the future is clear as Carle Health reinforces our commitment to excellent clinical care,” Dr. Leonard said. “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 will continue to be available through the Hally/MyChart member platform beyond the end of the year.
About Health Alliance
Health Alliance™ is a leading provider-driven health insurance plan based in Champaign, IL, serving Illinois, Indiana, Iowa and Ohio. Established in 1980, Health Alliance is the largest health insurer in downstate Illinois and is part of Carle Health, an integrated system of healthcare services, which includes an eight-hospital system, multispecialty physician groups, as well as Carle Illinois College of Medicine and Stephens Family Clinical Research Institute. In Illinois, Health Alliance offers individual and employer group plans, individual and group Medicare Advantage plans, and Medicare Supplement plans. In Indiana and Iowa, Health Alliance offers employer group plans and Medicare Advantage plans. And in Ohio, Health Alliance offers Medicare Advantage plans. For more information visit HealthAlliance.org.
About FirstCarolinaCare
Based in Southern Pines, North Carolina, FirstCarolinaCare (FCC) is a not-for-profit insurance company, a jointly owned subsidiary of North Carolina-based FirstHealth of the Carolinas and Illinois-based Carle Health. FCC partners with Health Alliance for administration of its health plans. FCC offers Medicare Advantage and employer group plans. For more information visit FirstCarolinaCare.com.
