Carle Health to Discontinue Health Alliance Plans by Year-End

CENTRAL ILLINOIS (WCIA) — Carle Health has officially announced that it will cease operations of its health plans through Health Alliance at the end of 2025, marking a significant change for one of the largest health insurers in Central and Southern Illinois.

A Shift in Coverage

Health Alliance, which is headquartered in Champaign, boasts a membership exceeding 240,000 individuals. However, as of January 1, 2026, all plans will be discontinued except for its Medicare Advantage offerings. This decision affects various employee groups within the region. Currently, about 7,000 individuals are enrolled in Health Alliance at the University of Illinois, with additional enrollments from the University of Illinois Chicago and the University of Illinois Springfield, totaling 300 and 150 employees, respectively.

James C. Leonard, MD, President and Chief Executive Officer of Carle Health, emphasized the need for the organization to realign its health plans to better focus on core services centered around patient health and well-being. He stated, “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.”

Operational Challenges

Carle Health’s release cited several challenges affecting the health insurance landscape, particularly for provider-owned insurers. Problems such as medical inflation, rising prescription drug costs, increased utilization of healthcare services, and the growing prevalence of chronic conditions have created significant financial pressures, necessitating the organization’s strategic pivot.

“As a leader in healthcare, Carle Health has an obligation to set the standard for excellence,” officials stated in a press release. This decision is part of a broader effort to redirect resources efficiently to serve patients and communities effectively.

Maintaining Services Through Transition

Throughout the remaining months of 2025, Carle Health confirmed that its health plans would continue operations essential for claims processing and fulfilling ongoing business needs, regulatory mandates, and contractual obligations. The organization is actively communicating with employees, customers, and partners to ensure a smooth transition and compliance with regulatory requirements.

Sinead Madigan, President of Health Alliance, expressed gratitude towards the health plan employees who have been pivotal in serving customers and emphasized their contributions over the years. “They have consistently brought innovative solutions, unique programming, and unmatched customer service to improve health outcomes,” she stated.

Group Coverage Details

Effective immediately, Health Alliance has outlined the following steps regarding group proposals, renewals, and coverage processes for existing and prospective customers:

Existing Group Customers: All existing insured Large and Small Group, Self-funded, Balance, and Medicare Supplement customers who have already renewed in 2025 will continue to receive coverage. However, all plans will end on December 31, 2025, regardless of contractual dates.
Group Proposals: Small Group insured proposals will be produced for effective dates through and including December 1, with all coverage concluding by the year’s end. For Large Group insured proposals, coverage will only be available through and including July 1, 2025. ### Member Support and Resources

Health Alliance members are encouraged to reach out to their client consultants for any inquiries related to the transition. Carle Health reiterated that membership information will remain accessible via the Hally/MyChart member platform even after the end of the year, ensuring that members continue to receive the support they need during this significant change.

As the healthcare landscape continues to evolve, Carle Health remains committed to its mission of delivering reliable healthcare services, prioritizing the needs and satisfaction of its patients and community.