What Baylor Scott & White Health Plan Is Exiting
Baylor Scott & White Health Plan (BSWHP) has announced a major strategic shift. The Dallas-based insurer will exit the Texas Medicaid Managed Care Program on August 31, 2026. Furthermore, it will discontinue all Individual Marketplace Plans under the Affordable Care Act after December 31, 2026. Together, these decisions mark one of the most significant coverage exits in Texas health insurance this year.
The health plan notified state regulators and informed employees about the decision on April 15, 2026. Consequently, tens of thousands of Texans now face a transition to new insurance coverage within the year.
Why the Health Plan Is Leaving
State Procurement and Market Pressures Drive the Exit
Two key factors drove BSWHP’s decision. First, the state of Texas did not award Baylor Scott & White Health Plan contracts in its recent Medicaid procurement process. The only exception was Lubbock — a region where Baylor Scott & White Health has no physical locations. This effectively made continued Medicaid participation unviable.
Second, leadership cited what it called “Individual Marketplace complexities.” Although the statement did not elaborate further, rising costs and a shrinking subsidy environment have made ACA marketplace plans increasingly difficult to sustain profitably. The expiration of enhanced federal subsidies has already pushed premiums higher for many Texas members. As a result, the plan determined that sustaining both lines of business was no longer financially feasible.
A Broader Industry Trend
Baylor Scott & White is not alone in stepping back from public insurance markets. Across the country, regional health plans are reassessing their participation in Medicaid and ACA exchanges amid reimbursement pressure, regulatory complexity, and procurement uncertainty. Nevertheless, this announcement marks a significant disruption for Texas specifically.
How Many Members Are Affected
125,000 Medicaid Members and 100,000 ACA Enrollees at Risk
Currently, BSWHP serves about 3.5% of Texas Medicaid enrollees — roughly 125,000 people. Additionally, the plan covers approximately 100,000 individual marketplace customers, representing about 2.6% of Texas ACA enrollees. Both groups will need to find alternative coverage once the exits take effect.
The Medicaid transition will happen first, with members needing to enroll in a new plan by August 31, 2026. ACA marketplace members have until the end of the year, though they should begin exploring alternatives during the upcoming Open Enrollment Period.
What Happens to Existing Coverage
Hospitals and Clinics Will Still Accept These Plans
Importantly, the exit applies only to the health plan — not the broader Baylor Scott & White Health system. Hospitals, clinics, and providers within the BSW network will continue to accept Medicaid and ACA marketplace coverage from other insurers. Therefore, patients with coverage through other plans will retain access to BSW facilities and physicians without disruption.
Members’ current coverage remains active through the end of their enrollment period. After regulatory approval, BSWHP will contact all impacted members directly with transition information and support resources.
Impact on Jobs and Employees
321 Roles Impacted Statewide
The exit will affect 321 positions across Texas, including 65 roles in North Texas. Employees supporting the Medicaid and marketplace lines of business face the most direct impact, along with a limited number of corporate and non-bedside roles.
However, Baylor Scott & White has committed to supporting affected workers through a structured transition program. Specifically, the organization is offering dedicated career guidance, priority access to open internal positions, funded reskilling for high-demand clinical roles, relocation reimbursements, and extended medical benefits.
Notably, the broader BSW system continues to grow. The organization added nearly 500 jobs in Temple and across Central Texas over the past year. Moreover, it is actively recruiting for more than 3,000 positions across its statewide network.
Where BSW Health Plan Will Focus Next
Employer Groups and Medicare Advantage Become the Priority
Going forward, Baylor Scott & White Health Plan will sharpen its focus on employer group plans and Medicare Advantage customers — segments where it believes it can deliver the greatest value. This strategic pivot reflects a broader shift among regional insurers toward more stable, contract-driven insurance markets rather than publicly administered programs subject to state procurement cycles.
What Affected Members Should Do Now
Act Early to Avoid Coverage Gaps
Members enrolled in BSWHP’s Medicaid or ACA marketplace plans should take action promptly. For Medicaid members, the state of Texas will provide guidance on transitioning to a new managed care organization before August 31, 2026. For ACA marketplace members, the upcoming Open Enrollment Period later this year will offer the opportunity to select a new plan for 2027.
Affected individuals should watch for direct communication from BSWHP, contact the Health Insurance Marketplace at Healthcare.gov, and consult a licensed insurance agent to evaluate their options. Acting early helps avoid any gap in coverage or access to care.
