PacificSource to end Montana insurance operations

PacificSource Health Plans, one of Montana's three primary health insurance providers, will cease its Montana operations and exit the marketplace by the end of the year.

"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," company spokesperson Amber Conger confirmed to the Daily Montanan on May 21. "This includes exiting the individual market, as well as the state of Montana."

The health insurance company has operated in Montana since 2012, providing individual, small and large group, ASO and Medicare Advantage health plans, and is contracted with more than 90% of providers in the state, according to the company.

According to information provided to the Montana Commissioner of Securities and Insurance, PacificSource counts approximately 11,000 individual health members, 15,000 small group members, 4,500 large group members, and 1,100 Medicare Advantage members in Montana, and serves as a third-party administrator for thousands of others.

A spokesperson for the Commissioner's office said the company informed the state of its decision earlier this week.

"Anytime a health insurance provider pulls out of the Montana market, consumers are impacted," Spokesperson Ethan Holmes said in an email to the Daily Montanan. "They're forced to shop for new plans, and with less options in the market, may have to choose one that doesn't serve their needs as well."

The Springfield, Oregon-based company cited headwinds across the healthcare industry as the reason for shrinking its footprint.

"These are not decisions made lightly. We know they will affect people's coverage and livelihoods, and we recognize the real impact on the individuals and communities we serve," Conger said. "The reality is the healthcare system is unsustainable: Costs continue to rise, access is inconsistent, and the experience often falls short of what people need and deserve. These are not abstract problems. They directly affect PacificSource's ability to continue delivering reliable, high-quality coverage to the people who count on us."

Rising healthcare costs have been a major talking point for years, especially last fall when federal subsidies for Affordable Care Act Marketplace plans were set to expire.

Individual marketplace plans in Montana increased for 2026 through all providers, with PacificSource asking for a roughly 12% increase; though the state's other insurers, Mountain Health Co-Op and Blue Cross Blue Shield of Montana, the largest, requested significantly higher increases for plans purchased through the federal marketplace.

PacificSource largely withdrew from the state of Washington in 2024, but will continue to operate in Idaho and Oregon, but the company has recently reduced operations in those markets as well.

In Oregon, the Willamette Week reported last October that PacificSource was planning to layoff 381 people — roughly one-fifth of its employees.

The company partially withdrew from that state's Medicaid system, affecting around 20,000 members in the Portland area, and ended a Medicaid contract with the state covering around 90,000 members in Lane County.

PacificSource will continue its individual plans in Montana through Dec. 31, 2026.

"Unfortunately, this will affect valued employees as we will reduce positions to match our restructured business units," Conger said in a statement. "We will help affected employees through this process as much as possible, including offering severance packages if they qualify per company policy … We are working to finalize those impact numbers and will share more information when it's available and will communicate directly with impacted employees first."

The company has offices in Helena and Billings, but has just a few dozen staff in Montana.

Holmes said Montanans who are concerned about the impact to their health insurance plans can reach out to the Commissioners office.

"Our office, specifically our Insurance Consumer Service (ICS) bureau, is dedicated to helping Montanans navigate the insurance market. We encourage Montana consumers to reach out if they have questions about their insurance coverage, especially if they are impacted by Pacific Source exiting the market,"Holmes said.

Courtesy of Daily Montanan