November 2025 | By Lindsey Miller, Program Director of Health Plan Solutions, Softheon
Key takeaways for provider-aligned plans:
- Community-based plans like Community First Health Plans are using partnerships to close gaps for members who fall between public and employer coverage.
- State and federal policy decisions on subsidies, exchanges, and ICHRA adoption will define the future of affordability and access.
- Success for health plans depends on education, operational agility, and technology that unites care delivery with member experience.
At this year’s Texas Association of Health Plans (TAHP) Annual Conference, health plan leaders, policymakers, and industry experts gathered to discuss one of the most important questions in healthcare today: how can provider-aligned health plans adapt to constant regulatory, financial, and operational change?
I had the opportunity to moderate a panel with three leaders who are not just navigating these changes, but actively shaping them:
- Josh Schultz, Head of Government Affairs, Softheon
- Ryan Clay, Government Relations Attorney, Lobbyist, and Principal, Texas Star Alliance
- Daverick Isaac, CFO, Community First Health Plans
Together, we explored how plans in Texas are addressing uncertainty in government-sponsored markets, especially as enhanced subsidies, Medicaid redeterminations, and rising premiums converge.
The Regulatory Pressure Cooker
Health plans in Texas are balancing complex realities. Enhanced subsidies created under the American Rescue Plan (ARP) are set to expire, and Congress has not yet determined whether they’ll be extended. Costs are rising, compliance demands are growing, and the path forward remains uncertain.
At the same time, new regulatory requirements are increasing pressure. Plans are adapting to:
- More complex CMS reporting standards
- Data-driven compliance demands
- Shifting Medicaid eligibility and potential work requirements
- Rising operational costs across claims, reconciliation, and member communication
These are the kinds of challenges that can’t be solved with more layers of manual effort. They require smarter systems and community collaboration. “Plans have to adapt faster than ever,” said Josh Schultz. “The greatest impact is how quickly they can adjust to both policy and operational shifts.”
For provider-aligned plans, agility can be a strategic advantage. Their dual structure allows for closer coordination between care delivery and insurance operations, which strengthens member retention and long-term value. But it also requires a unified infrastructure capable of managing the financial and administrative complexity that comes with doing both.
Enhanced Subsidies Expire, the Ripple Effects Begin
Texas has seen one of the largest expansions of ACA Marketplace enrollment in the country, growing from around 1 million to nearly 4 million members since 2021. But as Josh noted, “A significant number of those individuals are at risk of lapsing if enhanced subsidies expire.”
Without these subsidies, younger, healthier members may opt out of coverage entirely, threatening stability in the state’s risk pool. Josh emphasized that health plans must be proactive: “Plans will need to educate members, explore more affordable plan options, and coordinate across the ecosystem to make sure people remain covered.”
The stakes are especially high in Texas, which has the nation’s largest uninsured population and has not expanded Medicaid. Losing subsidies could push more residents back into the uninsured category and increase uncompensated care costs across the state.
Before the ACA, Texas had fewer than 700,000 marketplace enrollees. Today, that number sits near 4 million. Much of that growth was fueled by enhanced premium tax credits. If those subsidies expire, Texas stands to lose coverage for roughly a quarter of its marketplace population — more than 1 million individuals. That loss would ripple through every layer of the system, from higher uncompensated care costs to greater strain on local health systems.
Ryan cited estimates that uncompensated care could rise by $1.5 billion statewide. “Since Texas didn’t expand Medicaid, more families rely on the private exchange,” he explained. “If those subsidies lapse, Texas gets hit harder than anyone else.”
The takeaway: while national policy decisions shape the rules, states like Texas feel the effects most acutely. For provider-aligned health plans, this means preparing now for coverage transitions, member education, and financial volatility.
The Local Impact: Community First’s Integrated Model
One of the most inspiring parts of our discussion came from Community First Health Plans, a provider-sponsored plan serving Bexar County and surrounding regions.
Daverick Isaac described how Community First, in partnership with University Health and CareLink, has built a provider-sponsored premium payment program that bridges care and coverage for those who fall between the cracks of traditional insurance pathways.
For residents who earn too much for Medicaid but can’t access affordable employer coverage, the program fills that gray zone. Members are enrolled into ACA plans through Softheon’s technology, while the health system covers all or a portion of the unsubsidized premium amount.
It’s a solution that helps everyone:
- Members receive comprehensive insurance coverage and remain connected to their local providers.
- The health system receives reimbursement for care that would otherwise be uncompensated.
- The county reduces the cost burden of safety-net programs.
What started as a 400-member pilot has now expanded to more than 4,000 members, with plans to reach 6,000 in the coming year. It’s a reminder that sustainable coverage isn’t just about financing — it’s about community connection and trust.
How Provider Plans Can Shape ICHRA’s Future
For policymakers, these models offer a blueprint for how local collaboration can improve coverage and outcomes without expanding Medicaid. Throughout the session, one acronym kept coming up: Individual Coverage Health Reimbursement Arrangement (ICHRA).
ICHRA allows employers to contribute tax-free funds toward employees’ individual market coverage, rather than sponsoring a traditional group plan. It’s a model built for flexibility — and one that could dramatically expand access in states like Texas.
Ryan pointed to Senate Bill 1949, which proposed tax incentives for small businesses that adopt ICHRAs. “Adoption of ICHRAs in Texas has been limited because of cost concerns,” Ryan noted.
“Only about 30 percent of small employers offer health coverage,” Josh explained. “That leaves a massive opportunity to expand access. In Texas, where approximately 90% of Texas businesses have 50 of fewer employees, ICHRA could play a major role in closing coverage gaps.”
Currently, ICHRA is an administrative rule, not a law. But bipartisan bills have been filed in Congress to codify it, giving employers greater confidence to adopt the model. Texas lawmakers have also introduced legislation that would create state-level tax credits for small businesses offering ICHRA coverage.
For provider-sponsored plans, ICHRA represents a chance to expand relationships with local employers and design products that keep care and coverage local. Community First is already exploring how to use ICHRA to help small employers provide affordable, predictable coverage while leveraging University Health’s trusted network.
Looking Ahead: Growth, Innovation, and Community Impact
As plans adapt to policy shifts, the technology behind those transitions matters more than ever. Softheon continues to partner with health plans like Community First to simplify complex processes — from enrollment and billing to reconciliation and member engagement.
When asked about future opportunities for provider-aligned plans, Daverick emphasized the importance of sustainable innovation. “Anyone in group coverage knows the prices are rising. And they are rising astronomically,” he said. “Now we have this opportunity with ICHRA. We can use our Marketplace plans to give this to small employers through an ICHRA administrator, working with Softheon to offer affordable healthcare and controlled costs.”
Community First is exploring ICHRA-based partnerships as part of its growth strategy, leveraging its strong network through University Health. “We want to be the landing spot for our community,” Daverick said. “Whether it’s Medicaid, Marketplace, or employer coverage, we want people to know there’s a place for them.”
A Shared Mission for Texas Health Plans
As we look toward Open Enrollment 2026, one thing is clear: uncertainty is here to stay. But within that uncertainty lies opportunity.
Alignment matters. Whether through integrated systems like Community First, policy advocacy for small business coverage, or forward-looking approaches to ICHRA, Texas health plans are demonstrating that collaboration between payers, providers, and policymakers is not only possible but essential. As costs rise and regulations evolve, the plans that will succeed are those that focus on operational efficiency, member education, and community trust.
Softheon remains proud to partner with health plans across Texas and beyond, helping them streamline operations, scale innovation, and create a seamless member experience. Because when health plans thrive, communities do too.
