Skip to main content
PacificSource is in retreat. This is revealed not just in layoffs—including a new large round announced in recent days—but in the Oregon-based health insurance company’s broad partial withdrawal from the state Medicaid system, including in the Portland area.
In recent weeks, PacificSource, which is owned in large part by Legacy Health, has announced it would no longer serve the Oregon Health Plan in certain sectors.
Take Portland metro. Most of the 400,000-plus members of Health Share of Oregon, the largest coordinated care organization in the region, get their Oregon Health Plan-based insurance through other entities, like CareOregon.
But some 20,000 of them are members of the Legacy-PacificSource plan and, with PacificSource pulling out, will likely have to be transferred to a new insurer.
In statements, Legacy Health and PacificSource both denied that the change would affect any members’ relationship with their medical providers.
“Legacy remains committed to serving our Health Share of Oregon Medicaid members and will identify a new administrative partner for 2026,” a spokesperson for the health system said.
“This transition should not disrupt any members’ provider relationships or continuity of care,” a PacificSource spokesperson said.
Perhaps far more significant changes are coming to Lane County, where PacificSource is set to end its contract with the state to provide health insurance to about 90,000 Oregon Health Plan members. The state is planning to assign these members to Trillium, an insurer operated by the for-profit company Centene.
PacificSource says it could not meet costs at the rate the Oregon Health Authority was offering it for 2026. The insurer is, however, set to continue to contract to offer the Oregon Health Plan in other areas of the state, like Marion and Polk Counties. And it will continue to offer other plans, on the commercial insurance market, for instance.
Then there are the layoffs. PacificSource recently confirmed to WW that it would in the coming months lay off 381 people, about one-fifth of the 1,800 employees it reports having had this summer. This includes 56 layoffs the insurer announced earlier, and a more recent announcement that it would cut 325 additional jobs. The Lund Report first reported on the latest round of layoffs, which the company earlier announced internally.
“Like many health plans, we continue to face significant pressures, including rising healthcare costs and Medicaid funding challenges in Oregon,” spokesperson Lauren Thompson said in an emailed statement.
In a notice to the state filed Wednesday, the company attributed the layoffs to a “significant loss of Medicaid membership” in Lane County. The insurer runs operations in other states too, but the notice said 265 of the employees affected by the latest layoff round are Oregon-based.
Legacy Health, one of the largest systems in Oregon, appoints a large portion of PacificSource’s board. According to merger approval documents, Legacy acquired half of PacificSource for $247 million in 2016, as part of a stated effort to form an integrated health care system.
Legacy itself has been drawing back. Citing “significant financial pressures,” an executive told staff earlier this month that the health system would soon close several clinics.
