‘It’s the Wild West’: Another Medicare Advantage provider pulls out of local market, leaving only one – maybe
Barney Lerten
BEND, Ore. (KTVZ) — Citing “significant industry challenges,” Providence Health Plan will no longer offer its Medicare Advantage supplemental plan to Deschutes County residents as of Jan. 1, leaving just one provider, PacificSource – if it can reach a contract agreement with St. Charles Health System.
KTVZ News reported earlier this week that PacificSource just advised their Deschutes County patients, both commercial and Medicare Advantage, that they could go out of network as of Jan. 1, if no deal is reached on a new contract.
Providence Senior Communications Manager Erin McClellan told KTVZ News, “I can confirm that due to significant industry challenges including rising health care costs, increased utilization, and evolving regulatory requirements, Providence Health Assurance will not continue to offer an individual Medicare Advantage Plan in Deschutes County in 2026.”
She added, “It’s important to note that this does not include or affect Providence Employer Group Waiver Plans, which are a type of Medicare Advantage offered by employers in many Oregon counties, including Deschutes.”
“We’re providing comprehensive support to 1,200 affected individual members during this transition, including dedicated customer service assistance and resources to help them explore their coverage options,” McClellan said.
Providence Health Assurance issued a news release Wednesday that announced their 2026 Medicare Advantage Plans, listing seven Oregon counties: Multnomah, Washington and Clackamas in the Portland area, along with Lane, Yamhill and Hood River counties.
However, Bend insurance agents who provide guidance in the complicated sphere of Medicare plans said the local Providence withdrawal actually could prove beneficial to the 1,200 affected customers. They will get a grace period of sorts to enroll in any other Medicare or “Medigap” plan, without needing to go through potentially troublesome review of their health status.
Michelle Thomas of Fall River Health Insurance Solutions, one of several local insurance firms that offer Medicare consultations, told us, “Members losing their Providence Medicare Advantage plan have a wonderful opportunity to reevaluate their options for 2026.”
“And, of course, we’re all hopeful that PacificSource and St. Charles come to an agreement,” she added.
But the uncertainty in both the local and national Medicare Advantage situation as the October 15-December 7 open enrollment period approaches has many people calling local insurance brokers – some in tears – for information to ease their confusion and fears.
“It really is the Wild West,” Thomas told us.
While PacificSource was legally required to advise customers of its possible “out of network” status, the chances of PacificSource leaving the market are “slim to none,” according to Jeff Hale of Town & Country Insurance in Bend, which also offers Medicare consultation through the Bend Medicare website.
And like Thomas, much of the explanation focused on St. Charles Health System, which operates all four Central Oregon hospitals.
“Pacific needs St. Charles, and St. Charles needs Pacific,” Hale said. He noted that PacificSource also has the Medicaid market in the area, as well as a commercial insurance contract.
Nationally, “the Medicare Advantage market is in shambles right now,” he said. Locally, “Humana, Aetna, Moda, Regence, Providence all left (the county) because St. Charles is a problem,” due to a lack of competition that can help control prices.
Thomas agreed: “Medicare Advantage plans nationally are kind of struggling – especially here, where we are limited to one hospital system.” Three years ago, she said, there were seven Medicare Advantage providers in Deschutes County.
She also pointed to another “pickle we’re in right now” that could especially affect PacificSource customers, if no contract agreement is reached: The federal regulatory agency, the Center for Medicare and Medicaid Services, is “still the boss, but they used to flex their muscles a little bit more.”
For example, she said, when Humana and St. Charles couldn’t agree on a contract in 2024, “we assumed CMS would make them pull out of the area,” citing the challenges of seniors who can’t easily cross the passes in winter to access care in other markets such as Portland and Eugene.
“We were floored when they didn’t require Humana to stay in the plan, but let them stay in network, even though they weren’t with St. Charles,” Thomas said.
But she also pointed out that two years ago, St. Charles and PacificSource contract negotiations “went down to the wire” before resolution.
“I think it’s an ugly negotiation tactic,” Thomas said. “Once they get the community involved, there’s more pressure on the carrier to come to the table.”
Still, when Providence Medicare Advantage customers get their notice of withdrawal from the market, Thomas said it will be “worth it’s weight in gold. That is their ‘hall pass’ for any plan they want, without any medical underwriting.”
Thomas said PacificSource might be “the last man standing, but in many cases, that may not be their best option,” due to medical issues, higher co-pays or not wanting to be subject to provider contract negotiations.
“For snowbirds in particular, where you can’t be limited to a certain network, do not self-research it,” she said. “Go to a broker like myself or others, sit down with them and talk about their specific needs.”
The Council on Aging of Central Oregon also offers free, unbiased Medicare assistance through trained counselors, part of the Senior Health Insurance Benefits Assistance (SHIBA) program.