Geisinger bets on its health plan as others exit

When Providence announced it was shutting down its health plan earlier this year after a $102 million loss in 2025, it joined a growing list of health systems stepping back from the insurance business. Carle Health’s Health Alliance, Michigan Medicine’s U-M Health Plan and others have wound down or are exiting, citing volatility in Medicare Advantage and government payer markets that have made provider-sponsored plans increasingly difficult to sustain.

Terry Gilliland, MD, president and CEO of Danville, Pa.-based Geisinger, is watching the same environment unfold and coming to the opposite conclusion.

“Rather than say, this is hard and dump the plan, we’ve made the necessary changes including leadership top to bottom to grow profitably,” Dr. Gilliland said.

Geisinger Health Plan is a 40-year-old subsidiary serving approximately 600,000 members across commercial, Medicare Advantage, Medicaid and CHIP lines in more than 40 counties in Pennsylvania. For most of the past decade, it expanded primarily through government payers. Starting in 2013, growth in Medicare Advantage and Medicaid drove the plan’s membership higher. The commercial book was not neglected by design, it simply wasn’t the priority.

That calculus has shifted. Government payer volatility has created an opening to address what he describes as a structural imbalance.

“We focused on government payers — whether it was Medicare, Medicare Advantage, or Medicaid expansion — we grew quite a bit through those programs,” he said. “And now with some of the lumpy ride with the government programs, it’s allowed us to focus on commercial membership so that we can grow that and fundamentally make our health plan a little bit more stable.”

The strategic logic behind the pivot isn’t primarily defensive. The health plan isn’t an insurance business running parallel to the clinical enterprise, but the mechanism that lets Geisinger think and operate differently than systems that only treat patients at the point of care.

“Integrated care and coverage is one of Geisinger’s biggest strategic advantages, and it lets us think beyond individual encounters and focus instead on prevention, outcomes, total cost of care, which is super important for the communities that we serve,” he said.

Greater alignment between the plan and the clinical enterprise led to fewer administrative friction points, better data sharing and coordinated care management. The goal isn’t to grow the plan for its own sake; it’s to use the plan’s coverage reach to deliver better outcomes at a lower total cost.

“The greater alignment between our plan and our clinical enterprise means a better experience, better outcomes for our patients and providers, lower friction, better affordability,” he said. “We already have a dance partner with our health plan, and so we want to utilize it to its fullest.”

The decision to lean in rather than exit carries real financial stakes. Geisinger is in the third year of a turnaround under Dr. Gilliland’s leadership, navigating the same headwinds — rising costs, workforce pressure, reimbursement volatility — that have pushed other systems toward divestiture.

Federal policy changes, including HR-1 and reductions in 340B and ACA subsidies, are adding pressure that Dr. Gilliland said are significant and ongoing. In that environment, recommitting to the health plan requires confidence that integration will deliver returns that standalone clinical operations cannot.

Geisinger’s health plan has the depth others do not. The plan has existed for four decades, has a large contracted network and operates across multiple coverage lines. The challenge now is rebalancing it — building the commercial membership base that will reduce the system’s exposure to government payer swings while preserving what Dr. Gilliland sees as the health plan’s core value: enabling Geisinger to take responsibility for the health of its communities, not just the care of its patients.

“We’ve got to get to better outcomes at a lower total cost of care,” he said. “We want to make sure that we strengthen the plan and put it on a sustainable path.”

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Geisinger bets on its health plan as others exit

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