Carle Health recently announced that as of Jan. 1, 2026, subsidiaries Health Alliance and FirstCarolinaCare will cease operating all lines of business except Medicare Advantage. Throughout the remainder of 2025, the health plans will maintain operations to support claims processing and meet ongoing business needs, regulatory mandates and contractual obligations.
Health Alliance has been a long-standing partner of Carle Health and its mission to serve patients and health plan members since 1989. FirstCarolinaCare joined Carle Health in 2020. In recent years, the health insurance industry has changed dramatically, particularly for provider-owned insurers. Because of this, health plans, like Health Alliance and FirstCarolinaCare have struggled to achieve operational and financial efficiency. Medical inflation, rising prescription drug costs, increased utilization of healthcare services, higher volumes of chronic medical conditions, coupled with an increased demand for technology and broad networks have placed considerable financial strain on those organizations.
While Health Alliance and FirstCarolinaCare have worked diligently over the past few years to grow to a size that might overcome these competitive disadvantages, they have not been able to reach a financially viable level to compete effectively in today’s environment.
“Carle Health and Health Alliance have been great partners over the past several years,” said Mickey Foster, CEO, FirstHealth of the Carolinas, in a press release. “As a minority owner of FirstCarolinaCare, we understand and support the decision by Carle Health. FirstHealth is a self-insured organization, therefore, we will begin the bid process for a new third-party administrator for group insurance for 2026.”
The organization has begun communicating with employees, customers and impacted partners as they prepare for the changes in the coming months. Operational leaders are working to ensure all necessary regulatory requirements are met and to facilitate the adjustments necessary to continue serving members seamlessly through the calendar plan year.
“Our vision for the future is clear as Carle Health reinforces our commitment to excellent clinical care,” Carle Health President and Chief Executive Officer James C. Leonard, MD said in a press release. “We are proud to have been a part of the health journey of countless individuals and families as we have served communities with medically informed health coverage for the past 40 years and will continue to earn the trust of patients and families as we move forward. Making the necessary decisions to safeguard our long-term viability is critical as we remain focused on being an enduring partner to the patients and communities we serve.”
Membership information will continue to be available through the Hally/MyChart member platform beyond the end of the year.
Based in Southern Pines, North Carolina, FirstCarolinaCare (FCC) is a not-for-profit insurance company, a jointly owned subsidiary of North Carolina-based FirstHealth of the Carolinas and Illinois-based Carle Health. FCC partners with Health Alliance for administration of its health plans. FCC offers Medicare Advantage and employer group plans. For more information visit
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