PacificSource cuts 97 Oregon jobs amid retreat from health insurance markets

PacificSource plans to lay off 97 employees in Oregon this summer as the Springfield-based health insurer scales back its operations amid mounting financial pressures.

In a Friday notice to state labor officials, PacificSource said it will eliminate positions in Portland, Salem, Bend and at its Springfield headquarters by July 31.

The layoffs follow the insurer’s recent decision to leave the Affordable Care Act marketplace in Oregon, Idaho and Montana after 2026 and exit Montana’s insurance market entirely. PacificSource officials said they are reducing staff to match a smaller operation.

“As a not-for-profit organization, PacificSource is making difficult decisions to ensure we can continue fulfilling our mission and serving members for the long term amid growing pressures across the healthcare industry,” Lauren Thompson, a spokesperson for the organization, said in a statement.

According to Thompson, roughly 60,000 members enrolled in affected plans will need to find new coverage for next year.

“These are not decisions made lightly,” she said. “We know they will affect people’s coverage and livelihoods, and we recognize the real impact on the individuals and communities we serve.”

PacificSource, a not-for-profit insurer partly owned by Legacy Health, covers about 500,000 members through Affordable Care Act marketplace plans, Medicare, Medicaid and employer-sponsored insurance in Oregon, Idaho, Montana and Washington.

The health plan has spent the past year pulling back from several lines of business. Last fall, the insurer announced it would stop serving Lane County as a coordinated care organization — the local networks that manage Medicaid coverage for Oregon Health Plan members. That move forced about 96,000 people to switch to Trillium Community Health Plan, another coordinated care organization in the region.

At the same time, PacificSource has faced increasing financial strain. Ratings agencies downgraded the insurer’s financial strength ratings last year, citing weaker capitalization and profitability challenges.

The latest cuts come as Oregon’s Affordable Care Act marketplace continues to shrink. About 21,000 fewer people enrolled in private marketplace plans during the 2026 open enrollment period, a 15% decline from the previous year.

The marketplace, often called Obamacare, serves self-employed workers, small business owners and others who don’t get insurance through an employer. State officials say enrollment fell after pandemic-era federal subsidies expired at the end of last year, leaving most people with smaller tax credits and some with no help at all. That drove premiums higher and pushed some Oregonians to buy leaner plans or drop coverage.

PacificSource’s departure from the marketplace puts it among a growing number of insurers nationwide that have announced plans to leave individual markets after 2026. The move also adds to broader changes in Oregon’s health insurance landscape, where several carriers have scaled back their business in recent years.

Earlier this month, Providence Health Plan announced it will stop offering most of its commercial insurance products — including individual, family and employer coverage — beginning in 2027. The shift will force hundreds of thousands of Oregonians to find new coverage. Providence, Oregon’s third-largest health insurer, currently covers more than 420,000 people in the state.

PacificSource has long been a significant player in rural parts of Oregon, and its withdrawal, combined with Providence’s exit from most of its insurance lines, could further reduce plan choices for some consumers.

Thompson said broader problems in the healthcare system, including rising costs, uneven access and disappointing patient experiences, are making it harder for insurers to operate sustainably.

“These are not abstract problems,” Thompson said. “They directly affect PacificSource’s ability to continue delivering reliable, high-quality coverage to the people who count on us.”

PacificSource does plan to offer severance packages to eligible workers under company policy. According to the filing, none of the affected workers are represented by a union, and employees will not have bumping rights that would allow them to displace other workers. The company did not identify which positions will be eliminated.

Thompson said PacificSource is “committed to transparency” as it helps members, employees and community partners understand what the changes mean for them.

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