Copyright The Oregonian
More than 300 PacificSource employees learned last week that their jobs will be ending, as the Oregon-based nonprofit health insurer moves to trim costs and steady its finances. The cuts affect 325 employees across departments and job levels, according to PacificSource spokesperson Lauren Thompson. She said the layoffs will hit company offices across Oregon, Washington, Montana and Idaho. “Like many health plans, we continue to face significant financial pressures, including rising health care costs and Medicaid funding challenges in Oregon,” Thompson said in an email statement. Some employees were let go right away, while others will stay on for a few more months. Affected workers will receive severance pay and career transition support and can apply for other open positions within the company, Thompson said. PacificSource sells commercial and Medicare Advantage plans but is also a major player in the Oregon Health Plan, the state’s Medicaid program that provides health coverage for 1.4 million low-income individuals and people with disabilities. It operates four coordinated care organizations that together manage benefits for more than 356,000 members in Central Oregon, the Columbia Gorge, and Marion, Polk and Lane counties. More health Southern Oregon provider settles health care fraud charge Oregon, 24 other states sue Trump administration over looming loss of food aid for needy Americans Neutrogena cleansing wipes recalled in four states The latest job cuts follow PacificSource’s earlier announcement that it would eliminate 56 positions as it winds down its subsidiary that handles third-party administrative services. That work will be outsourced to PNC Bank beginning next year, it said. PacificSource’s financial struggles mirror a broader reckoning across Oregon’s health insurance and Medicaid landscape. CareOregon, another large nonprofit Medicaid insurer, reported an operating loss of about $230 million last year and has also reduced staff and left positions unfilled. Medicaid insurers say that the funding model for the Oregon Health Plan is under strain, with the state’s per-member reimbursement rates to coordinated care organizations failing to keep pace with rapidly rising costs for services, especially in behavioral health. To ease that pressure, the Oregon Health Authority offered to raise Medicaid payments to insurers by an average of 10.2% per member in 2026, up from the 3.4% increase initially budgeted for the 2025-2027 biennium. The higher rate reflects provider rate hikes and higher-than-expected use of services, especially for behavioral health and substance use disorder treatment. Still, PacificSource notified state officials last month that it will not renew its contract to serve as a coordinated care organization in Lane County starting in 2026. The latest available financial filings with the state show that PacificSource’s Medicaid operation in Lane County lost roughly $6.6 million through mid-year 2025. Its coordinated care organization in the Columbia Gorge also lost money, while its CCOs serving Central Oregon and Marion and Polk counties were modestly profitable. When PacificSource leaves Lane County next year, Trillium Community Health Plan, another coordinated care organization serving the region, will absorb the roughly 96,000 members currently enrolled through PacificSource.
