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PacificSource has said it will cut ties with Medicaid at the end of the year, saying the rates the state pays to cover people are simply too low. It's still not clear what will happen to the nearly 92,000 people in the county who currently receive Oregon Health Plan coverage via PacificSource.
This story was updated Sept. 28 with new details. A new explainer here has the latest information.
Nearly 70% of people who rely on Medicaid for health care in Lane County may lose their current coverage through the insurer PacificSource in the coming months. That’s more than 90,000 members of the Oregon Health Plan, the state’s Medicaid program.
Lane County is experiencing the first fallout in Oregon as state leaders wrangle how to pay for the care of 1.4 million lower-income residents.
The reasons and implications are complex, but here are the basics as Lookout Eugene-Springfield begins its coverage.
What does PacificSource do for Oregon Health Plan members?
Generally, PacificSource helps manage a network of providers, so that people who qualify for Medicaid have access to medical, dental, and behavioral health services.
Isn’t PacificSource private insurance?
Yes. PacificSource also offers private insurance plans that people pay for directly or receive through their employer. Those plans are not affected.
PacificSource, a nonprofit, offers Medicare, which is federally managed, and is also not affected. Additionally, PacificSource offers plans through Oregon Health Plan as what is known as a “coordinated care organization.”
What are coordinated care organizations?
Coordinated care organizations, often called CCOs, are the local entities that deliver services from the Oregon Health Plan. Sixteen CCOs cover several regions in the state. In Lane County, the CCOs are offered by PacificSource Community Solutions and Trillium Community Health Plan.
PacificSource launched its CCO, PacificSource Community Solutions, in Lane County in 2020. Trillium was the sole CCO in the county before then.
What does this disruption mean for people who use PacificSource Community Solutions?
People who use PacificSource Community Solutions will not experience immediate disruptions, according to Amy Bacher, Oregon Health Authority’s spokesperson for Medicaid.
The health authority has a process for ensuring members maintain their CCO coverage, and will continue to do so in the coming months, Bacher said. The state can also require PacificSource enter a 90-day extension if another provider hasn’t been found, Oregon Health Authority spokesperson Kristen Lambert said Sept. 26.
Are negotiations between PacificSource and the health authority still underway?
Sept. 26, Lambert said, “I can confirm that CCO rate negotiations for 2026 are over,” and, “it is certain they will no longer be a CCO in Lane County in 2026.”
Though, in a statement to Lookout Eugene-Springfield, PacificSource’s vice president of Medicaid programs, Erin Fair Taylor, reinforced the insurer is open to discussions with the Oregon Health Authority on alternatives. Otherwise, it will stop serving Lane County on Jan. 1, 2026.
What happens to coverage should PacificSource exit?
If PacificSource leaves, it would work with other CCOs, such as Trillium, to transition care, PacificSource spokesperson Lauren Thompson said. That would include transferring authorizations for specialty care, prescription information and care management plans.
In response to whether Trillium could absorb 90,000 people, spokesperson Courtney Johnston said in an email Sept. 26, “Trillium has the capacity to support this transition and are working closely with Oregon Health Authority to understand their expectations.”
The health authority plans to have another network provider in place by Jan. 1, but didn’t offer more details.
Leadership at Lane County Public Health, which oversees Community Health Centers of Lane County, is still evaluating the potential impact, spokesperson Jason Davis said. Their first and main priority is maintaining care for patients and the many programs that could be impacted, he said.
Why is this happening?
The Oregon Health Authority pays CCOs predetermined monthly rates to manage and deliver care in their coverage areas. Those rates are set annually.
This year, the health authority proposed a reimbursement rate that executives with insurance companies said was too low to cover the number of Oregon Health Plan members, according to The Lund Report.
PacificSource Executive Vice President Jim Havens told The Lund Report that enrollment has surged and costs have risen faster than state payments. The company lost $40 million in 2024 and projected an operating loss of up to $100 million in 2025, with 2026 potentially higher.
He cited rising administrative costs and increased demand for behavioral health services as key drivers.
CCOs had a Sept. 18 deadline for 2026 contracts, and PacificSource filed notice that it would not renew in Lane County.
Why is Lane County specifically hit hard?
Annual reimbursement rates for CCOs vary by county, based on available services and the health needs of local populations, said Thompson, the PacificSource spokesperson.
The insurer compared the Oregon Health Authority’s proposed rates with expected costs in each region and found the largest funding shortfall in Lane County, she said.
Who uses PacificSource in Lane County?
Of the nearly 92,000 people who use PacificSource in Lane County through the Oregon Health Plan, roughly a quarter are children.
Enrollment data from the Oregon Health Authority shows about 131,000 people in Lane County rely on Medicaid for health coverage. Eligibility is based on income and family size. For example, the maximum monthly income limit for a family of four ranges from about $3,000 to $4,500.
What do elected officials say?
Such a pullout could further strain Eugene and Springfield’s health care system, where providers are already overbooked, and emergency room wait times exceed the state average.
Lookout Eugene-Springfield reached out to Rep. Lisa Fragala, D-Eugene, who has spoken openly about these challenges, for a response to the latest development.
“It is unacceptable that 90,000 people could be faced with an interruption to critical health care services at a time when Medicaid is already under attack at the federal level,” Fragala said in an email. “I believe we need to slow this process down and understand why is it that only PacificSource members in Lane County are confronted with this crisis and to urge the Oregon Health Authority to convene a broad stakeholder workgroup to review issues and advise on community centered solutions for the long-term sustainability of Medicaid in Lane County.”
Lookout Eugene-Springfield also contacted House Speaker Julie Fahey, D-Eugene, who has spoken about concerns with Medicaid access.
“We are working closely with our partners at the Oregon Health Authority to ensure Lane County residents who are covered by the Oregon Health Plan continue to have access to high quality health care,” Fahey said in an email. “Oregon must protect health care at a time when reckless Republican policies at the federal level will result in Oregonians losing coverage or paying more for insurance in the near future.”
Spokesperson Lucas Bezerra for Governor Tina Kotek said she is “closely monitoring PacificSource’s decision not to renew its contract” and “is engaged with OHA leadership to minimize care disruption for members and ensure adequate coverage in the region.”
It is likely too early for federal cuts under the Trump administration to have affected PacificSource, and it remains unclear what will happen when they take effect. Oregon health care providers, including PeaceHealth, have warned of devastating impacts in the coming months from the GOP-backed bill.
What do you know?
If you’d like to share your experience as an Oregon Health Plan member, or have information about access, email us: newsroom@lookoutlocal.com.
This story has been updated to correct the spelling of Courtney Johnston’s name.
