Dive Brief:
- PacificSource Health Plans, a nonprofit health plan offering coverage in four states in the Pacific Northwest, is exiting the Affordable Care Act market next year and ending all operations in Montana.
- PacificSource is the latest insurer to flee the exchanges as rising costs and policy turbulence make it more difficult for smaller payers to remain operational.
- “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,” a spokesperson told Healthcare Dive.
Dive Insight:
PacificSource, which is partly owned by Oregon-based nonprofit health system Legacy Health, has about 500,000 members across ACA, Medicare, Medicaid and employer-sponsored plans in Idaho, Montana, Oregon and Washington.
The company is significantly downsizing its operations in 2027 amid rising financial strain, PacificSource confirmed to Healthcare Dive. Roughly 42,000 members will be impacted by the exits, a spokesperson said, and PacificSource plans to lay off a number of employees as well.
The spokesperson declined to provide how many employees will be let go, saying the company is finalizing a number and wants to communicate with impacted personnel directly. Currently, PacificSource employs more than 1,500 people, according to its website.
The decision wasn’t made lightly, according to a spokesperson. But, “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,” they said over email. “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.”
PacificSource has been attempting to rightsize its business over the last few years. The nonprofit cut its presence in Washington in 2024, dropped a Medicaid contract in Oregon in early 2025 and laid off roughly 300 employees last fall, according to local reports.
But despite the cutbacks, which did boost PacificSource’s earnings and capitalization, the company’s financial position remains weak, credit ratings agency AM Best said late last year.
PacificSource’s announcement came days after Providence Health Plan also said it would shutter most of its health insurance business, including its ACA plans, at the end of this year. Providence cited similar pressures, including rising costs and the impossibility of competing with heavily consolidated national carriers.
Regional plans are in an “untenable situation,” Providence said. Baylor Scott & White, another integrated health system, also plans to exit its Medicaid and ACA businesses this year.
Large national carriers have also been affected by the maelstrom of higher spending and flatlining reimbursement hitting government programs. CVS’ Aetna left the ACA exchanges for 2026, while Cigna recently bowed out of both the ACA and Medicare Advantage markets.
