Nearly 3 in 4 health plans lost money in 2025 — and the gap between winners and losers is widening

Health plans are entering a new financial era. HealthScape Advisors' 2026 report on the industry finds that nearly three-quarters of health plans posted an operating loss in 2025, and the losses are becoming structural rather than cyclical — a growing share of organizations are now stacking up three or more consecutive years in the red. The pressure isn't limited to the balance sheet, either: for physicians, it shows up directly in the prior authorization crisis squeezing practices, and in payer scorecards that continue to rate reimbursement and communication poorly.

Medical cost growth, not weak revenue, is the culprit — outpatient utilization, GLP-1 drugs, provider consolidation and higher-acuity care are all outpacing premium increases. Government lines face extra strain, with Medicare Advantage underperformance and Medicaid enrollment losses tied to the One Big Beautiful Bill Act. Meanwhile, a widening capital divide separates plans that can keep investing from those forced into affiliations or exits. HealthScape lays out three priorities for building resilience: treating capital as a strategic asset, actively managing the drivers of medical trend, and shaping a more constructive provider strategy.