PacificSource, Trillium and unanswered questions on Medicaid

It’ll be nothing, like a pin prick.

That’s the message 90,000 Lane County residents who rely on Medicaid for their health care are hearing from the state and PacificSource, their soon-to-be-former health insurer.

Springfield-based PacificSource’s announcement that it wasn’t renewing its state contract to deliver Medicaid services to Lane County enrollees has left county leaders and medical providers in the dark about what will happen on Jan. 1.

Not to worry, the Oregon Health Authority says. Trillium Health Plans, the other Lane County organization that manages provider networks for patients enrolled in the Oregon Health Plan, is ready to step in.

Forget about the fact that adding 90,000 patients would quadruple the size of Trillum’s member pool, or that patients, providers and even Lane County commissioners have voiced concerns about Trillium’s ability to take on so many new patients.

PacificSource’s withdrawal from Lane County marks a staggering turnaround from a few years ago, when the insurer seemed to be riding high off its expansion of Medicaid coverage from central Oregon and the Columbia Gorge into Lane, Marion and Polk counties. The company paid $26 million in 2018 to buy the 400,000-square-foot Springfield complex that formally housed the cybersecurity firm Symantec, and moved 500 Lane County employees into the building the following year.

Today PacificSource employs more than 1,800 people across the Pacific Northwest, with more than 800 people in Springfield, a company spokeswoman said. That makes it easily one of Springfield’s largest private employers and a significant source of tax revenue for the city.

A look at PacificSource’s financial records provides some clues and raises some questions about how the insurer went from growth mode to retreat.

PacificSource reported a $68.5 million loss from providing Oregon Health Plan services in excess of its state reimbursement in 2024, according to financial filings. That’s more than double the amount that any other Medicaid insurer operating in the state lost last year. Health Share of Oregon, the largest insurer in the state covering the Portland metro area, reported $16.3 million in losses. Corvallis-based InterCommunity Health Network reported the second biggest loss, at $33.9 million.

PacificSource had reported an average profit of more than $51 million in the four previous years. Company officials did not respond to Lookout’s questions.

Federal Medicaid dollars are delivered to Oregon through the Oregon Health Plan, which distributes money to entities called Coordinated Care Organizations, or CCOs, which then coordinate with medical providers in their regions to deliver care to low-income Oregonians. Twelve different insurers operate as CCOs in 16 different regions across Oregon. PacificSource is unique among CCOs, operating in four different regions encompassing nine counties.

The losses PacificSource reported are combined in one number, across its four regions, making it impossible to determine whether Lane County’s 90,000 members drove a disproportionate share of Medicaid losses. Company officials didn’t respond to that question and related ones.

But it leaves Lane County searching for some answers quickly:

• How can a potential transition of 90,000 Oregon Health Plan members from PacificSource to Trillium be as seamless as the state is reassuring us?
• What sort of resources and assistance from the Oregon Health Authority would Trillium need between now and Jan. 1 to successfully transition members without any disruptions in medical service? Who will make a public step-by-step accounting — now — of what must happen for a transition to succeed? How will transitioning members specifically be helped along the way?
• With Trump administration cutbacks to Medicaid funding looming, what do we so far know about what the future holds for Oregon’s CCO model and the state’s ability to contain Medicaid costs?

Then there are questions about PacificSource. Amid online chatter and anonymous reports of impending layoffs, the company says no staffing decisions have been made yet. But giving up on 90,000 patients doesn’t bode well. If those patients transition to Trillium and PacificSource reduces staff, could Trillium hire those employees?

For Oregon Health Plan patients, it may not matter who’s providing their coverage as long as they can see a doctor or visit a clinic knowing they have coverage. But the burden now lies with the Oregon Health Authority to make good on its claim that the transition will be as seamless as they say for Lane County members on Jan. 1.

If they’re wrong, that pin prick might leave a lasting mark.