Presbyterian Health Plan is eliminating most of its Medicare Advantage plans for the 2027 plan year, a move that will force roughly 30,000 New Mexico enrollees to pick new coverage this fall. The Albuquerque-based insurer, part of nonprofit Presbyterian Healthcare Services, says the plans it is dropping contributed to more than $59 million in losses in 2025 alone. The exit makes Presbyterian the latest and largest regional health system to abandon a business line it once used to compete directly with national carriers, and it comes with a cost the company has been unusually candid about tallying in public.
The Loss Presbyterian Put a Number On
Presbyterian confirmed the decision to trade outlets in early June, attributing it to the $59 million shortfall tied specifically to its Medicare Advantage book, along with rising medical costs and what the company described as growing administrative complexity in the program. That complexity includes federal changes to Medicare Advantage star ratings and risk-adjustment formulas, which determine how much insurers get paid per enrollee and have squeezed smaller, regionally concentrated plans harder than national ones. Presbyterian will keep offering individual-market, Medicaid, and employer-sponsored coverage; only its standard Medicare Advantage lineup is being shut down.
The retreat did not happen in isolation. Fitch Ratings had already downgraded Presbyterian Healthcare Services’ credit rating to AA- from AA in February, citing several years of weak operating performance, persistent cash-flow pressure, and rising labor costs, while keeping the outlook negative. Presbyterian Health Plan’s chief operating officer, John Johnson, later told New Mexico’s Legislative Health and Human Services Committee that continuing to sell the plans had become financially unsustainable for the organization, tying the exit directly to the system’s broader balance-sheet strain rather than a single bad contract year.
The company is cutting about 150 health plan and administrative jobs alongside the plan exit, but has drawn a sharp line between that reduction and its clinical workforce. Presbyterian says the job losses will not touch direct patient care, and it is simultaneously trying to fill roughly 870 open clinical positions across its hospitals and clinics. The contrast signals where Presbyterian believes its financial exposure actually sits: not in delivering care, but in underwriting a federal insurance product that has stopped paying its own way.
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Why the Dual-Eligible Plan Survives While Standard Coverage Doesn’t
Not every Presbyterian Medicare Advantage member is losing coverage. The company is keeping its Medicare Advantage Dual Plus Special Needs Plan, which serves about 13,000 New Mexicans who qualify for both Medicare and Medicaid, even as it discontinues the plans covering the other roughly 30,000 members. Dual-eligible special needs plans are financed differently than standard Medicare Advantage products: they draw on Medicaid wraparound funding and carry higher federal risk scores tied to the more complex medical needs of that population, which can make them financially viable even when a plan’s ordinary commercial-rate coverage is not.
That distinction sharpens what Presbyterian is actually walking away from. The members being displaced are enrolled in what Johnson called the company’s “basic plan” — the standard, market-rate Medicare Advantage product that competes on premium and benefits rather than on subsidized risk pools. Those are the enrollees who will need to actively choose a new Medicare Advantage plan, a standalone Part D drug plan, or a return to Original Medicare during this fall’s federal open enrollment period, which runs from October 15 through December 7 for coverage that begins January 1, 2027. Presbyterian has said 2026 coverage will continue unchanged for everyone currently enrolled.
Losing an insurer’s plan outright, rather than seeing premiums or benefits shift, is a heavier lift for affected seniors because it eliminates continuity of coverage entirely — provider networks, drug formularies, and supplemental benefits like dental or vision reset from scratch with whichever plan a member picks next. New Mexico’s Medicare Advantage market will have one fewer major regional option competing for those enrollees than it did a year earlier.
A Reimbursement Fight That Signals a Wider Pattern
The Medicare Advantage exit was not the only source of scrutiny Presbyterian faced from state lawmakers this summer. On June 1, the company’s insurance arm implemented a new reimbursement method for speech-language, physical, and occupational therapy providers that clinicians warned would be financially catastrophic for local practices, potentially forcing reduced hours or closures. Presbyterian reversed the policy after provider pushback reached the Legislature, but the episode arrived weeks after the Medicare Advantage announcement and read to some lawmakers as part of a broader retrenchment rather than an isolated misstep.
Rep. Patricia Roybal Caballero, an Albuquerque Democrat, told the committee the pattern reflected a structural problem rather than a one-off decision: Presbyterian’s Medicare Advantage plans serve about 30,000 members, she noted, and losing that scale of coverage “when the need is great but the money’s not” amounts to an exodus lawmakers should be watching closely. National reporting has since placed Presbyterian’s exit inside a broader wave of 2027 Medicare Advantage retreats, including Providence Health Plan’s move to end most of its insurance business, even as larger national carriers like Humana project continued membership growth.
That split — regional, system-owned plans retreating while national carriers expand — leaves New Mexico regulators with less leverage over a company that is simultaneously the state’s largest Medicaid managed care plan and, until this year, one of its largest Medicare Advantage insurers. Presbyterian still reported more than $59 million in losses tied to the discontinued plans, a figure the company put on the record rather than disputed, which is precisely why lawmakers treated the hearing as a warning sign rather than a routine business update. Whether New Mexico’s remaining insurers can absorb 30,000 displaced enrollees without gaps in coverage is the question the state now has until December to answer.
This article was researched and drafted with the assistance of artificial intelligence.
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