Add Memorial Hermann to the list of health systems winding down their insurance arms “in light of the sustained headwinds facing the health insurance industry.”
The southeast Texas system’s insurance subsidiary, Memorial Hermann Health Plan, has informed brokers, employers and providers that it plans to wind down and close its employer-focused offerings.
These include Memorial Hermann Commercial Health Plan, a health maintenance organization (HMO); Memorial Hermann Insurance Company, a preferred provider organization (PPO); and Memorial Hermann Health Solutions, which is a third-party administrator for self-funded health plans.
The system, in notices, said it plans to fulfill obligations under those products’ existing policies through their termination date, and groups that are due for a renewal prior to Dec. 1 will be permitted to enroll in a final year of coverage. It also plans to honor all issued proposals with effective dates on or preceding Aug. 1, and had stopped issuing new business proposals on May 18.
Not affected are Memorial Hermann’s Medicare Advantage HMO, which according to the Centers for Medicare and Medicaid Services enrolled over 14,000 members as of January.
Memorial Hermann does not publicly disclose the number of members in its employer-focused plans. Financial documents outline $193.5 million of total premium revenue collected by the system during the 2025 fiscal year (ended June 30, 2025), and $181.7 million across the nine months ended March 31, 2026. The system reported about $84 billion and $7.2 billion in total revenue during those same two windows.
Memorial Hermann Health Plan wrote in its notices that the decisions were 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.” It also noted that it would be “difficult” to reach sufficient scale to remain sustainable.
For health systems, running an insurance plan business is a hedge against downturns in care delivery operations and poor rates while potentially driving traffic to their services. But while some are making new inroads, a stiff economic picture has led other major names to scale back their existing businesses.
Elsewhere in Texas, Baylor Scott & White said it would be exiting the individual marketplaces and Medicaid. Providence, on the West Coast, started the year seeking a buyer for its Providence Health Plan business but in May began laying the groundwork to end “most” of its insurance business lines, including individual and employer group/commercial plans.