Provider-Backed Health Plans Set to Gain as ACA Market Shifts

Provider-sponsored health plans (PSHPs) are in a prime position to benefit from disruptions in the Affordable Care Act (ACA) marketplace, according to Marc Bryant, senior vice president at Softheon. As large national insurers such as Aetna exit markets due to unsustainable risk pools, local, provider-backed plans could capture members seeking trusted, community-based coverage—especially as 2026 open enrollment approaches.

“These plans have something others can’t replicate: local trust and established patient relationships,” Bryant said. “When members lose their coverage because a big carrier exits, they’re not always looking for the cheapest premium anymore. Many want a plan that’s connected to providers they already know and trust.”

Bryant

He referred to past market shifts, such as how Baylor Scott & White regained ACA market share in Texas after Bright Health’s exit.

PSHPs combine the insurer and provider under one roof, allowing for better coordination of care. Bryant said this integration helps manage chronic conditions, reduce unnecessary hospital readmissions, and improve member experience.

“Because their structures break down silos between payer and provider, they can align around the member journey in ways traditional insurers often can’t,” he said.

PSHPs are also more efficient. Bryant said provider-backed plans operate with smaller teams and use partnerships for technology and day-to-day operations.

“Industry research shows that payviders who automate routine processes like enrollment and billing can reduce administrative costs by 10-25%. That kind of operational efficiency is how smaller, leaner teams stay competitive,” he said.

This efficiency extends to care coordination.

He added that clinicians and insurance teams would be able to make decisions faster because there are fewer layers to navigate.

“For example, a doctor can usually get a prior authorization approved by a PSHP much faster than by a larger organization,” Bryant said, adding that the streamlined workflow would reduce costs and create a smoother experience for members.

The potential impact of ACA subsidy changes further favors local, provider-backed plans. Without enhanced subsidies, consumers could shift focus from the lowest price to perceived value.

“When people have to pay more out of pocket, they stop shopping purely on price and start looking at value. That’s when the provider relationship really matters,” Bryant said.

According to research cited by Bryant, PSHPs tend to score higher on quality measures and member satisfaction than traditional insurers, making them more appealing when out-of-pocket costs rise.

While rural markets have been seen as opportunities for PSHPs, Bryant said that urban areas, including Miami and Houston, are also seeing growth.

"Market disruption creates opportunity everywhere, not just in rural areas," he said. "Urban health systems with strong local market presence can step in, as can their rural counterparts, but there’s a difference when it comes to scale.

He added that urban markets “simply offer the potential for much larger membership numbers” and that research has shown that PSHPs often perform best in secondary urban markets where no single insurer dominates.

“Those conditions give provider plans more room to grow while still leveraging a strong local reputation,” he said.

With a September 30 deadline for ACA plan participation announcements, the next few weeks will reveal which plans can capitalize on market exits.

“The smartest ones aren’t waiting to see what happens,” Bryant said. “They’re already talking to brokers, updating their systems and making sure they can handle rapid health insurance enrollment growth.”

He said that over a million members could be affected by Aetna’s departure from 17 states, highlighting the importance of operational readiness for provider-backed plans.

Looking beyond 2026, Bryant said scale will be critical for long-term success.

“The research shows that PSHPs need significant scale to compete effectively, typically around 400,000 members. That’s leading to more partnership approaches rather than going it alone,” he said.

Mid-sized markets with strong local health systems teaming up with experienced payers seem to be set up for growth. As ACA market turbulence continues, PSHPs appear ready to capture members who value local trust, efficient operations and high-quality care.