As insurers and provider-sponsored health plans reassess their exposure to Medicare Advantage, Detroit-based Henry Ford Health is moving in the opposite direction.
Medicare Advantage enrollment at Health Alliance Plan by Henry Ford Health surged 45.8% year over year to 132,566 members as of June 30, up from 90,935 a year earlier.
Margaret Anderson, president of Health Alliance Plan, told Becker’s the growth reflects a strategy years in the making: one built around network expansion, affordability and tighter integration with Henry Ford Health.
“As a regional plan and an integrated delivery system, we’re here for the long term. We are not a payer that’s going to be in and out of counties, degrading benefits or doing service area reductions,” Ms. Anderson said. “These are the communities where we practice and live, so we have a commitment to the communities that we serve in Michigan.”
A market Henry Ford can’t ignore
Health Alliance Plan recently expanded its Medicare Advantage network across the entire Lower Peninsula of Michigan, where Ms. Anderson said about 96% of providers are now in network.
That expanded reach has been paired with plan designs intended to compete aggressively on affordability.
“As seniors are shopping and looking at options, we kind of rise to the top of the list based on the affordability piece,” she said.
But Health Alliance Plan’s biggest strategic advantage may be its integration with Henry Ford Health, as more consumers shop for care and coverage to be closely connected rather than managed separately, according to Ms. Anderson.
The organizations offer a Medicare Advantage product built exclusively around Henry Ford Health’s high-performing network, which includes 13 hospitals, about 550 care sites and more than 5,000 physicians. The product offers benefits including $0 primary care copays and lower out-of-pocket costs for certain services.
“We were looking to launch a product that combines the strengths and the benefits of the care delivery system alongside those of the health plan,” Ms. Anderson said. “We spent a lot of time on research, data and analytics to understand what consumers are really looking for in the market — understanding there’s a lot of market disruption — and thinking how to bring an affordable product to market that’s actually competitive and has benefits that people actually want.”
Ms. Anderson pointed to physical therapy as a prime example of a benefit that has provided substantial value for consumers and that wasn’t initially on the health plan’s radar.
Discussions with Henry Ford physicians showed that repeated copays could become a barrier for patients undergoing several months of therapy, prompting the plan and health system to reconsider how those benefits were designed.
“When we sat down with our provider partners at Henry Ford Health, we found out that copays were starting to be a barrier for people to sustain long term,” she said. “We were able to pull some levers to create that affordability for our shared patients and members.”
That integration also gives Health Alliance Plan more room to reduce administrative friction.
“We’re able to work together to keep our administrative costs low. We don’t have redundancies in thick-cost administrative departments — things like HR and IT,” according to Ms. Anderson, noting that the plan’s administrative loss ratio is below 11%, allowing more premium dollars to go toward benefits. “We’re able to bring those costs down based on our economies of scale.
“From a Henry Ford Health perspective, it gives us the opportunity to really ideate and innovate together. If we can remove barriers based on our plan design, that allows the physicians to practice based on what the members’ needs are faster, and to get them into care quicker.”
Prior authorization is another area where the model differs.
“We approach prior authorizations in partnership with our provider network and look to eliminate or reduce where we can,” she said. “That’s huge from an administrative standpoint and when you look at how long it takes to move through that continuum.”
Henry Ford Health and Health Alliance Plan are also moving their shared populations onto more closely connected technology infrastructure. The plan invested in Epic’s Tapestry payer platform — with an eye on meeting CMS’ new interoperability rules taking effect Jan. 1 — while Henry Ford Health has consolidated nearly all of its hospitals onto Epic.
Ms. Anderson said having payer and clinical information on the same technology platform can give clinicians more direct visibility into coverage and reduce time spent determining whether medications or services are covered.
Why retreat isn’t the plan
The strategy stands out as Medicare Advantage has become increasingly difficult for many insurers and health systems.
Plans are contending with reimbursement pressure, changing star ratings, higher utilization and growing regulatory complexity. Some national insurers have reduced benefits or exited counties, while health systems across the country have dropped Medicare Advantage contracts amid concerns about administrative burden, denials and payment delays.
Henry Ford sees the same pressures but a different strategic calculation.
Michigan’s Medicare market makes Medicare Advantage too significant to sideline. Ms. Anderson estimated Medicare penetration in the state at 63%, while Michigan’s population continues to age without a comparable influx of younger residents entering commercial or ACA plans.
“If you’re not going to be in Medicare Advantage, what are you going to be in?” she said, noting that Michigan’s population continues to age while providers are not seeing an influx of people entering the ACA or commercial markets. “Medicare Advantage is a very important product line, and we have to work with each other, with our product design and with CMS to see what we can do to be the best plan possible and to offer the most competitive, affordable products that we can.”
The challenge is particularly acute for people aging into Medicare.
Five to seven years ago, health plans and providers often viewed people turning 65 as members they could attract and retain for the long term, according to Ms. Anderson.
“Now that’s not true as we know people move around a lot,” she said. “Where our challenge is with that particular population is that the CMS model really does not support funding for people who are turning 65.”
Ms. Anderson said those pressures could be especially difficult for people transitioning from ACA coverage or Medicaid into Medicare, who may face added complexity understanding their coverage options.
“I think we’re in a bit of a quagmire,” she said. “The way the model is designed, it’s really going to be tough to attract, and for people turning 65 to really understand what their options are.”
Health Alliance Plan advocates on those issues through the Alliance of Community Health Plans and has discussed them with CMS, which Ms. Anderson said has been receptive to hearing health plans’ concerns. But she said the broader question of how to adequately support people entering Medicare remains unresolved.
“I hope that we continue to think about how we invest in this population,” she said. “I believe very strongly in Medicare Advantage. It needs funding, and unfortunately, we’re going in the opposite direction.”
Health Alliance Plan sees its regional model differently from national insurers that can enter or leave markets based on performance, but recent market disruptions have also created growth opportunities.
Competitors have reduced service areas or benefits in Michigan in recent years, creating openings for Health Alliance Plan, according to Ms. Anderson.
“Michigan is clearly a market that attracts a lot of Medicare Advantage buyers, so it’s a very competitive market but we’re not seeing that same disruption from the nationals,” she said. “However, we are seeing it from our two biggest local competitors. Blue Cross Blue Shield of Michigan last year disrupted members with service area reductions and benefit degradation. We are seeing it with another regional plan here for 2027.”
Health Alliance Plan has added about 40,000 Medicare Advantage members while retaining 92% of its existing membership.
Henry Ford Health’s financial results show both sides of that expansion.
Healthcare premium revenue increased 26.1% year over year to $1.7 billion during the first six months of 2026, driven primarily by Medicare Advantage growth. Healthcare provider expenses rose even faster, increasing 34.4% to $1 billion. The system reported an 86.9% medical loss ratio.
Ms. Anderson said the plan is not pursuing Medicare Advantage as a high-margin business but sees it as central to the health system’s mission.
“When we look at the big picture, if we can hit 1% margin on this line of business, we would be happy with that,” she said.
Pushing margins materially higher could mean stripping benefits from members, which runs counter to the plan’s strategy, according to Ms. Anderson.
“As a regional plan, we want to take every dollar we can and remain affordable and competitive in our product offering,” she said.
Data over guesswork
Health Alliance Plan began investing heavily in its Medicare Advantage infrastructure about nine years ago, a decision Ms. Anderson said has become increasingly important as the market grows more complicated.
“The complexity and the pace of change” are now among the biggest challenges for Medicare Advantage leaders, she said.
The plan uses data and analytics to model potential changes in CMS reimbursement, provider costs, state requirements and other variables. Rather than betting on one forecast, the plan runs multiple scenarios to understand what different policy and funding environments could mean for its membership and finances.
“We have deep expertise on our Medicare Advantage pricing and bid team. You have to have that,” Ms. Anderson said. “We spend a lot of time looking at the data and analytics, then we do scenario planning on what we think could happen.”
“None of us have a crystal ball, but let’s say CMS rates go up by 2% in 2028, what would we do with that? What would that mean to our book of business? Conversely, what if the rates go down? What if our provider contracts go up? What if we get a new requirement from the state that we have to fully fund this benefit? Scenario planning and forecasting and really understanding your membership — investing in those areas — is crucial to be successful in Medicare Advantage today.”
That same approach extends to member engagement.
Health Alliance Plan studies members who enroll, stay and leave to understand which benefits affect satisfaction, retention and health outcomes. Ms. Anderson pointed to dental benefits as an example: If data show members who use preventive dental services have better health profiles, the plan can target outreach encouraging other members to use the benefit.
The plan also tracks how members prefer to communicate, whether by text, email or phone.
“If we can contact people at certain points where they are in their journey with the method where they want to be communicated with, we have a much higher success rate of helping them reach their health goals,” she said.
Those investments aim to make Medicare Advantage sustainable even as the economics become less predictable.
Ms. Anderson said uncertainty around CMS funding and star ratings remains one of the greatest risks to the business. But the system is not backing away.
For now, Henry Ford Health’s strategy is to keep growing, but not growth for growth’s sake. The goal is to pair an affordable product with a high-performing network, use integration to strip out administrative waste and maintain enough margin to keep investing in members.
As a health system committed to Michigan’s aging population, Henry Ford Health sees Medicare Advantage as a business it needs to get right as opposed to an optional growth bet.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
