PacificSource Cuts 134 More Jobs as Oregon's Health Insurance Market Continues to Shrink

PacificSource has announced 134 additional layoffs, the latest sign of upheaval in Oregon's health insurance market, where shrinking competition is feeding higher costs for the public.

The new cuts bring the total number of job reductions announced by the Springfield-based insurer since summer 2025 to more than 600. At that time, the company reported having 1,800 employees. According to its public notice, the layoffs stem from a decision to scale back its offerings and pull away from certain lines of business. They are set to take effect by the end of the year and affect offices in Portland, Bend, Salem and Springfield.

A company spokesperson said such decisions are not made lightly. "The reality is, the health care system is unsustainable: Costs continue to rise, access is inconsistent, and the experience often falls short of what people need and deserve," the spokesperson said, adding that these problems directly affect the insurer's ability to keep providing reliable, high-quality coverage.

PacificSource, which is largely controlled by Legacy Health, had more than 400,000 Oregonians enrolled in its plans as of 2025. It is not the only carrier to step back. Over the past year, Portland-based Moda Health said it would serve a smaller geographic area, and Health Net made a similar move. Providence Health Plan, which had made an unsuccessful attempt to outsource much of its work to Silicon Valley, has since said it will shut down entirely by the end of the year.

State officials describe the retreat as both a result and a cause of rising prices. Oregon regulators recently approved rate increases of 21% and 15% for next year's Affordable Care Act plans; KFF put the national median increase at 15%. Regulators told state lawmakers the hikes reflected several pressures, including the expiration of enhanced federal tax credits, quickly growing claims costs, lower enrollment, and "diminished competition due to carriers leaving markets."

Public spending is also set to climb. The Oregon Health Authority this week announced an average 6.1% per-member increase in payments to the companies that run Medicaid, which will mean hundreds of millions of dollars more in taxpayer funds next year. That figure looks relatively modest only when set against the recent run of runaway health care cost inflation.

Close observers say the trajectory is unsustainable for households, employers and governments alike. Although the health care system is closely tied to federal policy, Oregon officials have pursued their own ideas. Former Gov. John Kitzhaber led a work group this summer that sought ways to rein in costs by streamlining administration, reducing system complexity and bringing stakeholders to the bargaining table more forcefully. Others favor a more sweeping approach: centralizing health benefits under a universal state health plan.