One of Illinois’ major health insurance providers, Carle Health, has announced it will be shutting down the majority of its health plans, including Health Alliance and FirstCarolinaCare, by the end of the year. This decision will leave nearly 250,000 policyholders in Illinois and North Carolina searching for new coverage.
Carle Health, based in the Urbana-Champaign area, cited financial pressures arising from competition with for-profit health insurance companies as the primary reason for ceasing operations of Health Alliance and FirstCarolinaCare. The company stated, “In recent years, the health insurance industry has changed dramatically, particularly for provider-owned insurers… 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.”
The closure, first reported by Times News Global, impacts approximately 187,000 policyholders. Health Alliance offers a variety of plans in Illinois, including individual and employer group plans, as well as Medicare Advantage and Supplement plans.
State Senator Chapin Rose, R-Mahomet, expressed concern regarding the impending job losses and the disruption to existing healthcare arrangements. Health Alliance employs over 600 people. Sen. Rose pledged support for affected employees and policyholders during this transition. “My office will stand by to try and help in any way we can in job training and recruitment efforts for the impacted employees,” Sen. Rose stated. “Continuity of care and access to trusted physicians must be the priority as thousands of local members will now be forced to find a new insurance carrier.”
Senator Rose further mentioned his team has spoken with the Central Management Services director to find healthcare options for families.
Health Alliance, originally launched in 1980 as CarleCare HMO, has been a significant presence in downstate Illinois for decades. It was renamed Health Alliance in 1989 and reorganized as a for-profit subsidiary of the Carle Clinic. While Health Alliance will cease operations, the company will maintain operations throughout the rest of 2025 to handle claims and manage regulatory and contractual obligations. Membership information will stay available through the Hally/MyChart platform.
