Jefferson Health patients in Whitemarsh, Plymouth and Whitpain townships who carry Highmark or Independence Blue Cross insurance could face out-of-network costs starting Jan. 1, 2027.
The region's largest health system notified insurance brokers on Tuesday, Oct. 13, that its Philadelphia and Lehigh Valley facilities could stop accepting Highmark insurance without higher payments, The Philadelphia Inquirer first reported. Jefferson had already warned in September that it would drop Independence Blue Cross (IBX) coverage under the same conditions.
The dispute hits close to home. Jefferson Moss-Magee Rehabilitation operates therapy locations in Blue Bell at 721 Arbor Way, Plymouth Meeting at 633 Germantown Ave. and Ambler at 250 North Bethlehem Pike, according to a Jefferson network directory. Patients at those offices who hold either insurer's plan could see their in-network status disappear.
Jefferson, a nonprofit with 33 hospitals stretching from South Jersey to Scranton, argues that Southeastern Pennsylvania hospitals are underpaid by private insurers compared to national averages. Michael Harrington, Jefferson's chief financial officer, told the Inquirer that "hospitals in southeastern Pennsylvania are reimbursed at nearly 40% below the national average, and IBX pays Jefferson roughly 40% less than that benchmark."
IBX pushed back. The insurer called Jefferson's public comparisons misleading, saying they rely on hospital markets in New York and California rather than Philadelphia-area rates. IBX said other regional health systems accept comparable reimbursement and remain profitable.
On the Highmark side, Dan Tropeano, a Highmark executive in Southeastern Pennsylvania, described the contract talks as normal in an Inquirer interview. "Negotiations in general have been more challenging in this cycle than they have in a long while because of the cost pressure that we're all experiencing," Tropeano said.
Neither side has disclosed how many patients would lose in-network access if the talks collapse, the Inquirer reported. IBX covered nearly 40% of commercially insured hospital patients in Southeastern Pennsylvania last year, according to an Inquirer analysis of state data. Highmark holds significant market share in the Lehigh Valley, where Jefferson also operates.
Both insurers and Jefferson have sent early warnings to patients. Experts told the Inquirer they expect a last-minute deal, similar to the agreement Main Line Health and UnitedHealthcare reached over the summer.
Thomas Cox, principal at iSolutions Insurance Advisors in Audubon, Montgomery County, told the Inquirer his clients are nervous. "We don't want to see them get caught in the middle of this and have their care interrupted," Cox said.
Jefferson has posted operating losses for seven straight years, excluding investment income, the Inquirer reported. Losses over the last two years topped $900 million, with roughly a third coming from its insurance subsidiary, Jefferson Health Plans.
The current IBX-Jefferson contract expires Dec. 31, 2026. Patients can check Jefferson's website or contact their insurer about network status.
