For most people, choosing a health plan starts with practical questions: What’s covered? Which doctors are in-network? How much will it cost? Those considerations matter, but they don’t tell the whole story. 

Health plans play a central role in shaping the health care system. While many plans may look similar on the surface, their underlying purpose and structures differ in very meaningful ways. Not-for-profit and for-profit health plans operate with distinct priorities that influence how resources are used and how care evolves over time.

Understanding those differences offers insight into how health plans make decisions — and why those decisions matter for communities. 

Two model types, two different priorities

There is a stark difference between not-for-profit and for-profit health plans. Not-for-profit plans, both in New England and nationally, are essential for providing affordable, high-quality, equitable care. Not-for-profit plans are community-focused safety nets, particularly for vulnerable populations. What happens to any surplus revenue? Not-for-profit plans reinvest those funds back into the organization, supporting member benefits, strengthening care delivery, funding community health initiatives, and building the infrastructure needed to address long-term health needs. For health plans like Harvard Pilgrim Health Care, close to 90 cents of every premium dollar they receive from members and employer customers go directly to their medical care. The remaining is spent on administrative costs, and, in good years, there is a razor-thin margin to reinvest back into the business and communities. Their success is measured not by shareholder returns, but by how effectively they serve members and communities. 

For-profit plans, by contrast, are accountable to shareholders and investors. Financial performance and returns play a central role in how priorities are set and how capital is allocated.

These differences reflect distinct operating incentives, not differences in intent or quality of care. Over time, those incentives influence whether an organization takes a longer-term view — investing in prevention, stability, and systemwide improvement — or focuses more heavily on short-term financial performance. In health care, where the benefits of prevention and equity often unfold over years rather than quarters, that distinction matters. 

Point32Health, a New England-based not-for-profit health and well-being organization, reflects this long-term approach. As the parent company of Harvard Pilgrim Health Care and Tufts Health Plan, it serves members across Massachusetts, Maine, New Hampshire, Rhode Island, and Connecticut. 

“Not-for-profit health plans are critical to the health care ecosystem,” says Patrick Gilligan, president and CEO of Point32Health. “As a not-for-profit, we don’t have shareholders; our members are our shareholders, and they are at the center of everything we do. And unlike many for-profit health plans, our work is our purpose: to guide and empower healthier lives.”

Turning evidence into action

One of the most consequential ways not-for-profit health plans differ is in their approach to research. Research helps identify health interventions that work, where gaps exist, and how care can be delivered more effectively and equitably. When research is embedded within a health plan, it is generated with real-world populations in mind, informed by the challenges health plans encounter every day. Those insights can be applied more quickly to benefit patients and communities.

That model is central to the work of the Harvard Pilgrim Health Care Institute, a research and teaching organization based within Harvard Pilgrim Health Care and affiliated with Harvard Medical School. Founded in 1992, the Institute was designed from the start to bridge academic research and health care delivery. Today, its positioning as part of Point32Health allows researchers to study how policies and interventions affect people in real time — and to translate those findings into care delivery and decision-making. 

During the COVID-19 pandemic, for example, Institute researchers examined how disruptions in coverage and access affected health outcomes. In collaboration with health plans, they assessed changes in enrollment and care utilization, helping leaders understand where gaps were emerging and how to respond. 

Other research has focused on telehealth access, analyzing how the rapid shift to virtual care affected different communities. By identifying challenges in who could access virtual services, researchers helped inform strategies aimed at improving access and ensuring that new models of care did not leave vulnerable populations behind.

In 2024, research at the Institute focused on some of the most pressing questions in prevention and care delivery. Studies examined how cardiovascular health trajectories begin to diverge early in life, shedding light on its impact on vulnerable populations before adulthood. Other research explored access to preventive tools — from vaccines to STI prevention — and how awareness, uptake, and support vary across populations. 

Ethics and accountability beyond the bottom line

Structure also shapes how health plans approach ethical questions. Health care decisions often involve competing priorities: affordability, access, and quality do not always align neatly. For not-for-profit plans, navigating those competing demands is part of their responsibility to the communities they serve. 

At Point32Health, an Ethics Advisory Group provides a forum for deliberating about these challenges. Bringing together clinicians, employers, members, and community representatives, the group explores complex issues that do not have simple answers — from affordability to expensive treatments to the ethical impacts of current health care topics and issues, as well as emerging treatments, drugs, AI, and technologies.

That commitment also extends beyond coverage through the Point32Health Foundation, which works with community organizations across New England to address social and structural factors that shape health. Guided by extensive community listening, the Foundation supports community-led initiatives that address root causes of health disparities, from improving access to nutritious food and stable housing to supporting caregivers, strengthening social connections, and expanding transportation and mental health resources. 

“Health is shaped by far more than what happens in a clinic or hospital,” says Kristin Lewis, executive vice president of Point32Health and president of the Point32Health Foundation. “By working alongside community organizations, we’re able to address the social and structural factors that influence health every day.”

This kind of engagement underscores that health plans are participants in a broader health system, not just financial entities.

Choices that affect care

The structure behind a health plan may not be common knowledge to most people, but its effects are not. It shapes whether resources are reinvested locally and in population health research, and whether decisions are guided by short-term returns or long-term health outcomes.

For individuals and families, choosing a health plan should always involve practical considerations. But taking the time to look at the organizations behind those plans can offer a deeper understanding of its impact beyond coverage.

Harvard Pilgrim Health Care, a Point32Health company, provides nationally ranked health plans and care-based programs and services to nearly 900,000 members in New England and beyond. Founded by doctors more than 50 years ago, it builds on that legacy and partnerships through an expansive network of doctors and hospitals nationwide to improve health outcomes and lower costs through clinical quality and innovative care management.  A leading, not-for-profit health and well-being company, Harvard Pilgrim Health Care guides members — and the communities it serves — to better health each day.