Health Net will leave the commercial employer‑group insurance market in California and Oregon, with most policies set to end in early 2027, the insurer told brokers.
Scope of the withdrawal
The exit covers the subsidiary’s small‑ and large‑group health maintenance organization, preferred provider organization and point‑of‑service plans. New business and renewals stopped on Sept. 1, and existing coverage is slated to cease on Feb. 28, 2027 unless a contract or regulator allows a later date.
In California, the move ends all small‑ and large‑group medical plans, including those enrolled through CaliforniaChoice. The company said it will keep processing claims and providing customer service throughout the transition period.
Impact on employers and members
Employers that currently rely on the plans must find replacement coverage for their workforces. Brokers will need to compare new options for network breadth and prescription drug benefits.
For employees, the change could mean switching doctors or pharmacies if the new plans have different provider lists. In practice, the shift may create short‑term confusion as HR teams scramble to meet deadlines.
From a practical standpoint, firms will likely prioritize plans that mirror existing cost‑share structures to avoid disrupting payroll deductions. Workers may see a brief lapse in coverage if the transition is not timed carefully.
Read Also: Advanced Therapies Boosted by Coordinated Care Efforts
Company’s broader strategy
The decision aligns with the parent’s focus on government‑sponsored programs. Centene describes itself as the nation’s largest Medicaid and ACA Marketplace insurer, serving 27.6 million members at the end of 2025.
In Oregon, the subsidiary will retain Medicare Advantage and Medicaid offerings through Trillium Community Health Plan, while commercial coverage disappears. The firm will continue to offer Medi‑Cal, Medicare and individual and family plans in California, including those sold on Covered California.
Financial backdrop
Second‑quarter premium and service revenue rose 4% year over year to $44.4 billion. The increase was partly driven by higher rates in the Marketplace and Medicaid lines, growth in Medicare prescription drug enrollment and state‑directed payments.
Adjusted net earnings for the quarter reached $1.1 billion, a swing from a $253 million loss a year earlier. The earnings beat supports the company’s raised full‑year profit outlook.
The withdrawal reflects a pattern of adjusting the insurance footprint as government program enrollment and medical cost trends evolve. Earlier this year, the firm announced it would exit Arkansas’ Medicaid expansion in 2027 and offered voluntary buyouts after enrollment declines.
