Published by the Portland Business Journal, September 16, 2026
Recently, a series of seemingly unrelated events within Oregon’s healthcare system, are beginning to reinforce one another, at a time when all financing segments—Medicare, Medicaid and commercial payers—are already under stress. These are not, in fact, isolated and disconnected events. Rather, they reflect the convergence of multiple factors, all driven by the unsustainable increase in the total cost of medical care, and are moving us relentlessly toward a cascading market event.
Notwithstanding the loss of federal Medicaid funds from House Resolution 1—an estimated $1.2 billion over the next 4 years—this is not just a “Medicaid problem.” It is a system problem. Our healthcare system has been on a financially unsustainable trajectory for decades, with over half of Oregon’s hospitals operating at a loss. HR 1 simply accelerated the arrival of a crisis that has been bearing down on us for years.
The loss of federal funds will be exacerbated by anticipated coverage losses from the new work requirements and more frequent eligibility redetermination, starting on January 1, 2027. This will lead to administrative churn, reduced enrollment, and an increase in uncompensated care—compounded by changes in the commercial market.
On December 31, 2025, the enhanced premium subsidies in the ACA individual market expired, increasing 0ut-of-pocket cost. As a result, over 21,000 (mostly healthier) people have dropped coverage, leaving a sicker risk pool and pushing insurers to raise premiums further.
The Oregon small group market faces the same challenge: risk concentration. As premium costs escalate, healthier groups seek more affordable options (e.g. level funding, self-funding, ICHRA). This not only shrinks the size of the risk pool, but those who remain are sicker, pushing insurers to raise premiums or to leave the market entirely.
In May, the Providence Health Plan (PHP) and PacificSource announced that they would be exiting the small group market at the end of 2026. In August, Moda announced that it would also be leaving the small group market overall, as well as the individual market in eight counties. The same month, PHP announced it would be leaving all additional markets—including small group, large group and Medicare Advantage. And on September 1, Health Net announced its exit from both the small and large group markets in Oregon.
That means over 170,000 Oregonians will be forced to find a new insurance carrier by early 2027. This will not only disrupt continuity of care, it is uncertain whether the remaining carriers can absorb this displaced enrollment without further withdrawals or enrollment caps.
We are all caught in the same downward vicious cycle. As cost increases, providers shift it to employers by demanding higher reimbursement, which is reflected in higher premiums. Employers shift the cost back onto employees through higher co-pays and deductibles—to the point that many, for all for practical purposes, are uninsured. The steady increase in the number of uninsured and underinsured Oregonians, further erodes provider margins, starting the cycle over again,
Taken together, these converging events are pushing us toward a potential catastrophic failure of our healthcare system. A catastrophic failure is defined as “the sudden, total and completely unrecoverable breakdown of a system, structure or component.” Its characteristics are that it is sudden, irrecoverable, and cascading – often triggering a chain of reactions that cause other, connected systems to fail.
One of those connected systems is the Oregon economy. The healthcare sector is one of the state’s largest employers, and in many rural communities, it is the single largest employer. It contributes over $38 billion each year to our economy. A major disruption or collapse of the healthcare sector, would have a staggering economic impact across the entire state. It would also dramatically reduce tax revenues, impacting every part of the general fund, including education funding, and the ability to invest in very young children, where the foundation for lifelong health is laid.
State political leaders—and those seeking office—should be sounding the alarm. They should be joined by employer and labor leaders, consumer groups, hospitals, physicians, and insurance companies. We are truly all in this together. We are all part of the same larger healthcare ecosystem which, itself, is unsustainable and drifting irrevocably towards a fiscal precipice.
Oregon has successfully navigated difficult healthcare cycles before, but 2027 is unusual because nearly every financing segment is under pressure at the same time. Our collective responsibility is to prevent these separate stresses from becoming a cascading market event
This is not the time to bemoan the passage of H.R. 1, or to wring our hands about the level of public sector reimbursement. It is time to move beyond blame to solutions. It is time to come together as Oregonians and take charge of our shared future. But we are running out of time. This work can’t simply be postponed until after the November election. To paraphrase Dr. Martin Luther King, we must remind ourselves of “the fierce urgency of now.”
We must choose whether we will falter and continue to blame one another, or whether we will rise and meet this challenge together —not as payers, providers and health care consumers, but as Oregonians.
