PacificSource has been bleeding red, reporting a $7.1 million loss during the first quarter, and is requesting the highest rate increase from the Insurance Division for its individual plans – 42.2 percent next year. At the same time, it was the only large Oregon insurance company to report losing members, with a drop of 6,157.
In total. PacificSource had 161,375 Oregon members on March 30, representing a 4 percent drop. And, in Idaho, PacificSource is said to have lost $26 million recently.
Coupled with that news, rumors have been circulating for months that PacificSource has been in talks with Providence to purchase its health plan.
A confidential source, who’s been a party to those conversations, told The Lund Report that such a sale offer actually came before the board of PacificSource. But its physicians – who represent 40 percent of the board and are in private practice – balked, fearing they would lose too much autonomy and preferred to keep their hands on the steering wheel.
When reached for comment, Kathy Jost, marketing and communications manager, told The Lund Report yesterday there was no truth to an impending sale. “PacificSource has no interest in being acquired and plans to remain an independent not-for-profit plan.”
Had the sale gone through, it would have given Providence a stronger foothold in Lane County as well as eastern, central and southern Oregon to expand its reach in the Medicare and Medicaid markets – as well as greater potential to bid on the upcoming contract for the Oregon Educators Benefit Board that’s expected to be released in early July.
Potential discussions about a merger could also have been the reason Providence has not announced a successor to Jack Friedman who announced his intention to resign as CEO of its health plan last year, but has delayed his departure until June 30.
Had the sale gone through, Ken Provencher, CEO of PacificSource, might have stepped into Friedman’s shoes. But, that’s pure speculation, of course
Providence was the rare exception among the state’s largest health insurance companies. It reported a profit, also known as net income, of $274,935 in the first three months of this year, down from an $8.4 million profit in the same quarter of 2014. It ended the quarter reporting a 10 percent growth in membership, with 209,380 members, not including self-insured employers, adding 21,975 people in the first quarter. About 76 percent of Providence’s plans are comprehensive traditional health insurance, with Medicare making up most of the difference.
Diane can be reached at [email protected].
