Health Systems as Insurers? Americans Say Yes to Local Plans

STONY BROOK, N.Y. – March 12, 2026 – Faced with escalating premiums and a labyrinth of coverage complexities, a substantial majority of Americans are signaling their readiness for a fundamental shift in the health insurance landscape. A new national survey reveals that nearly three in four U.S. adults (74%) would likely opt for a health insurance plan offered directly by their local hospital or health system, provided the cost is competitive with traditional insurance options.

The findings, from a survey commissioned by healthcare technology firm Softheon, arrive at a critical juncture for American healthcare. With pandemic-era ACA subsidies now expired and private insurance premiums on the rise, consumers are increasingly feeling the financial squeeze. This pressure is forcing a reevaluation of the long-standing divide between healthcare providers and insurance payers, creating a significant opening for new, more integrated models of care. The receptivity is even more pronounced among parents with young children and the self-employed, with over 80% of both groups indicating they would embrace a provider-sponsored health plan (PSHP).

"Health insurance decisions are becoming increasingly difficult for many," said Eugene Sayan, founder and CEO of Softheon, in a statement accompanying the release. "This is prompting consumers and even employers to reconsider how they engage with health coverage."

The Shifting Tide of Consumer Trust

The survey data paints a clear picture of a public weary of the status quo. When asked about persistent problems with their current health insurance, nearly half of respondents (47%) cited high costs as their primary grievance. This was followed by widespread confusion about what their plans actually cover (34%) and poor communication between their insurance company and their doctors (23%).

This dissatisfaction has created a distinct split in how consumers view the strengths and weaknesses of different players in the healthcare ecosystem. Respondents indicated greater trust in provider-sponsored plans to understand their unique health needs (53%) and to act in their best interests (54%). This suggests that the established, personal relationship patients have with their doctors and local hospitals extends to a belief that these entities would be more empathetic and patient-focused insurers.

However, traditional national insurers still hold an edge in consumer perception when it comes to core operational functions. A majority of respondents believe the established players are better at providing clear information about coverage (54%) and processing approvals quickly (56%).

Crucially, neither provider-sponsored plans nor traditional insurers managed to secure more than 60% trust in any single category. This "trust gap" indicates that no single entity has won the definitive confidence of the American public. It highlights a wide-open opportunity for any plan—whether a startup PSHP or an incumbent insurer—to differentiate itself by excelling in the areas consumers care about most: clear communication, cost-effectiveness, and a genuine focus on member well-being.

A Strategic Lifeline for Strained Hospitals

The growing consumer interest in provider-sponsored plans aligns with powerful economic forces reshaping the hospital industry. For years, health systems across the country have been grappling with a precarious financial environment characterized by declining reimbursement rates from government and commercial payers, coupled with soaring operational costs for labor and supplies.

Launching an insurance plan offers a potential strategic lifeline. By becoming a payer, a health system can capture the full premium dollar, rather than just the fraction paid for services rendered. This creates a diversified revenue stream that can buffer the organization against the volatility of fee-for-service payments and the financial burden of uncompensated care for uninsured patients.

Furthermore, operating an integrated plan allows a health system to more effectively manage population health. With direct access to claims and clinical data, providers can implement proactive wellness programs and chronic disease management initiatives. The goal is to keep patients healthier, reducing the need for expensive hospitalizations and emergency procedures—a strategy that benefits both the patient's health and the health plan's bottom line. In a competitive marketplace, offering a seamless, all-in-one package of care and coverage can also be a powerful tool for attracting and retaining patients, fostering a new level of brand loyalty.

The High Hurdles of Becoming a Payer

While the strategic rationale is compelling, the path for a hospital to become an insurer is fraught with challenges. The transition requires a profound shift in mindset, operations, and financial strategy, moving from a mission of treating the sick to one of managing financial risk for a large population.

The first and most significant barrier is capital. Launching an insurance plan requires a massive upfront investment to meet state-mandated solvency and reserve requirements, designed to ensure the plan can pay out claims even in a worst-case scenario. Beyond capital, health systems must navigate a dense thicket of state and federal insurance regulations, a domain far outside their traditional expertise.

Operationally, hospitals must build an entirely new administrative infrastructure from the ground up. This includes developing expertise in actuarial science to price plans correctly, underwriting to manage risk, and building systems for claims processing, member services, and provider network management. While a PSHP naturally includes its own facilities, it must also contract with external providers to offer comprehensive coverage, adding another layer of complexity. These are functions that large national insurers have spent decades and billions of dollars perfecting, presenting a formidable competitive challenge for any new entrant.

The Digital Backbone Making Integration Possible

The immense operational lift required to launch a PSHP is where technology becomes a critical enabler. The vision of integrated care is increasingly being made a practical reality by a new generation of healthcare technology companies that provide the digital backbone for these emerging models.

Firms like Softheon offer specialized Software-as-a-Service (SaaS) and Business Process-as-a-Service (BPaaS) platforms designed to handle the complex administrative functions of a health plan. These solutions manage everything from initial member enrollment and eligibility verification to ongoing administration, renewals, and regulatory compliance. By outsourcing this complex infrastructure, health systems can significantly lower the barrier to entry into the insurance market.

"More people want their insurance and their doctors working together," Sayan noted. "That expectation creates opportunities for health systems that can deliver a provider-aligned model of integrated care and coverage, and for technology companies like ours that provide the technological backbone to deliver both seamlessly."

This technological layer allows hospitals to focus on their core competency—providing high-quality patient care—while leveraging a proven platform to manage the intricacies of the insurance business. As consumer demand for integration grows and financial pressures on providers intensify, the synergy between health systems and the technology partners that empower them may very well define the next chapter of the American healthcare industry.