PacificSource to lay off 134 more Oregon workers as insurer continues to shrink

PacificSource plans to cut another 134 jobs in Oregon as the Springfield-based health insurer continues to shrink its business.

The nonprofit insurer told state labor officials on Tuesday that it will permanently lay off employees in Portland, Salem, Bend and at its Springfield headquarters by Dec. 31.

The layoffs follow several earlier rounds of job cuts. In May, PacificSource announced plans to eliminate 97 jobs as it prepared to leave the Affordable Care Act marketplaces in Oregon, Idaho and Montana after 2026 and exit Montana’s insurance market entirely. The nonprofit said about 60,000 members would need to find new coverage next year.

Last fall, PacificSource announced more than 380 layoffs across four states after it shuttered a subsidiary that handled administrative services for other health plans and struggled with rising health care costs and Medicaid funding pressure.

In all, PacificSource has announced more than 600 layoffs across its operations since last fall.

The company did not say how many employees would lose their jobs in each city or which positions it plans to eliminate. PacificSource officials said the insurer was reducing staff to match its smaller operation.

“The reality is the healthcare system is unsustainable,” Marcy Marshall, a PacificSource spokesperson, said in an email. “Costs continue to rise, access is inconsistent, and the experience often falls short of what people need and deserve.”

The insurer has been pulling back from several lines of business amid financial strain.

Last fall, the insurer announced it would stop managing Medicaid coverage in Lane County 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.

PacificSource will also no longer offer Medicare Advantage plans in Multnomah, Washington and Clackamas counties in 2027, leaving affected patients to find new coverage.

The insurer, which is partly owned by Legacy Health, previously reported covering about 500,000 people through Medicare, Medicaid, employer-sponsored and individual health plans across four states.

PacificSource has long been a major insurer in rural Oregon. Its pullback from several insurance markets, along with Providence Health Plan’s exit from the insurance business, comes as regional insurers struggle with rising health care costs and competition from larger national insurers.

Ratings agencies downgraded PacificSource’s financial strength ratings last year, citing weaker finances and struggles to turn a profit. The company has blamed rising health care costs and other industry pressures for its decision to scale back.

According to Wednesday’s notice, none of the employees affected by the latest layoffs are represented by a union. Marshall said PacificSource will offer severance packages to qualifying employees and help others “as much as possible.”

“These are not decisions made lightly,” she said. “We know they will affect people’s coverage and livelihoods.”

©2026 Advance Local Media LLC. Visit oregonlive.com. Distributed by Tribune Content Agency, LLC.