Memorial Hermann Health System plans to shut down its commercial health insurance business.
The wind-down affects the Houston-based system’s HMO, PPO, and self-funded products for employers. On its website, the system said it would be difficult to reach the scale needed to sustainably provide value to members moving forward. The closure notice does not include the system’s Medicare Advantage business, which serves nearly 15,000 enrollees.
“This decision was made following a careful and comprehensive assessment of system assets and resources, including an evaluation of existing opportunities and future challenges amid sustained pressures on health system-owned health plans,” the system wrote.
Current coverage will remain in effect, and providers can continue treating members through each plan’s termination date, which will vary by employer group. Groups whose plan year is set to renew before Dec. 1 will have the option to enroll in one additional year of coverage before the full closure.
Memorial Hermann joins a growing group of health systems exiting or pulling back from the insurance business as financial pressures persist industrywide. Most recently, Renton, Wash.-based Providence said in May it would mostly shutter its health plan starting next year.
Memorial Hermann said it is fulfilling its obligations under existing policies through each plan’s termination date and will work with employers, brokers and providers to coordinate a transition to other coverage. Members actively receiving treatment when their coverage ends may qualify for continuity of care or transition of care exceptions.
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