Tacoma, Wash.-based MultiCare Health System has entered the Medicare Advantage market with its new health plan, a move more than a decade in the making that runs against a tide of health system-owned plan closures across the country.
MultiCare Health Plan officially launched in October, offering an MA HMO plan with prescription drug coverage in Pierce, Thurston and Spokane counties. The three counties were chosen because they’re where the health system has the deepest care delivery infrastructure, including hospitals, physician practices and urgent care clinics. The system said it’s targeting just a couple thousand members for its first year in a deliberate move to start small.
“Our goal is to be a payvider, where we are both the insurer and the care provider,” MultiCare’s CFO and EVP of population-based care, James Lee, told Becker’s. “That combination we think is especially important in our strategy to take care of the population.”
Mr. Lee added that inadequate traditional Medicare reimbursement, costly prior authorization battles with large MA plans and the growing instability of payer-provider relationships all factored into the decision.
“The other aspect is that our contact with many Medicare members today happens once they show up in our emergency room,” he said. “We would like to change that relationship and help them stay well, and not have the first encounter with them be when they have an acute episode.”
The new plan comes amid a longstanding population health strategy that began with a clinically integrated network, MultiCare Connected Care, more than a decade ago. The health system then invested in Olympia-based Physicians of Southwest Washington and gradually increased its ownership stake over the years. The physician group, which will support the health plan, has provided infrastructure for MultiCare’s value-based contracts that now cover 400,000 lives in fully capitated risk arrangements. PSW named Karen Decaran-Voigt, a veteran payer executive with prior roles at Molina, UnitedHealth and Elevance, to serve as the plan’s president.
The launch also adds a layer to MultiCare’s recently completed merger with Corvallis, Ore.-based Samaritan Health Services, which closed Nov. 1 and created an 18-hospital system. Samaritan exited the MA market for the 2026 plan year after its CEO said the system could no longer offer the plans at a loss, though it still offers Medicaid, D-SNP and commercial products.
Mr. Lee said Samaritan’s plans will now fall under MultiCare’s finance division, but that nothing changes through 2027.
“With the merger, we are going to extend PSW capabilities to Samaritan Health Plans and help not only lower their administrative costs, but also bring enhanced capabilities with care management and the clinical transformation efforts that we are doing,” he said.
Rising utilization, tighter CMS rate updates and star ratings volatility have squeezed provider-owned plans especially hard in recent years, with several citing losses that made their insurance arms a drag on the broader system. Ten health system-affiliated insurers are among the 18 total plans exiting the MA market in 2027 alone.
But Mr. Lee noted that the systems that have stuck with the payvider model long-term have weathered difficult stretches rather than exit entirely because they see Medicare economics for provider-only organizations getting worse, not better.
“Our journey here has taken quite a long time,” he said. “A lot of the payers, as you see in this environment, if they find it financially unappealing to them, they just exit the market. There is no long-term commitment to it. We’re not going anywhere. We’re committed to this.”
