This article was originally published by The Lund Report and is used with permission.
Springfield-based PacificSource has begun layoffs of about 300 people, or roughly one-sixth of its workforce, a spokesperson confirmed Friday.
The layoffs follow a round of 56 layoffs reported last month. The new layoffs were announced internally early last week, sparking social media posts.
PacificSource offers commercial plans as well as a Medicare Advantage plan. In Oregon, the not-for-profit also has been a major player in providing care to people of lower incomes in the Oregon Health Plan, operating four regional care organizations that together cover about a quarter of those in the program — serving more than 356,000 people from Klamath to Hood River County, as well as Marion, Polk and Lane Counties.
The insurer was among several Oregon Health Plan contractors that warned the Oregon Health Authority in August that the state’s proposed rates this year would lead to hefty losses and risked their ability to stay in business. In September PacificSource “reluctantly” announced it would pull out of Lane County at the end of this year, after state officials — who faced a federal deadline — declined to continue contract negotiations as the company had requested.
“Like many health plans, we continue to face significant financial pressures, including rising healthcare costs and Medicaid funding challenges in Oregon,” a PacificSource spokesperson wrote in response to a query from The Lund Report Friday. “To continue to meet the needs of our members and ensure the long-term sustainability of our organization, we are making the difficult decision to eliminate approximately 300 positions.”
The layoffs touched all departments and reportedly included entry-level workers up to department heads.
“Transitions will take place over the coming months, with some positions continuing into early 2026,” according to the statement. “Affected employees will receive severance and career transition support. Employees may also apply for open positions within our organization.
It added, “We are deeply grateful for the contributions of our team members and remain focused on our mission of providing high-quality care and service to the communities we serve.”
In addition to its Springfield headquarters, PacificSource has five other offices in Oregon, as well as offices in Washington, Idaho and Montana. Before last week’s layoffs, it employed about 1,800 people.
According to the most recent figures from Oregon’s Division of Financial Regulation, PacificSource Health Plans cover 83,308 Oregonians with its group and individual plans. Its CCOs cover more than 356,000 people. PacificSource’s Medicare Advantage plan covers more than 39,000 Oregonians.
After PacificSource announced its pullout from Lane County, Trillium Community Health tentatively agreed to pick up coverage for PacificSource’s 92,000 low-income members in Lane County, though some details had not been worked out. State officials hope to extend PacificSource’s contract by at least 30 days into February, to give Trillium more time to line up enough providers.
Last December, a bond rating company, AM Best, downgraded its assessment of PacificSource’s finances, citing losses. But earlier last week AM Best announced it had changed to a more optimistic take on PacificSource due to its plans to make “cost optimization” changes.
As one of only three Oregon-based insurers, along with MODA Health and Regence, PacificSource has fought to compete with larger competitors with more leverage — a challenge cited by company leadership when explaining its decision to largely pull out of Washington state last year.
PacificSource is half-owned by Portland-based Legacy Health, which is facing its own financial challenges.
