Providence Health Plan’s planned exit from most of the health insurance market in 2027 means many Portland employers will soon need to find a new benefits solution. Rather than simply replacing one carrier with another, this transition presents an opportunity to rethink how health benefits are funded and delivered. By exploring alternatives now, employers can position themselves to reduce costs, improve employee access to care, and achieve better long-term results. The Legacy Direct Partnership Plan offers one potential path forward.
Providence Exits the Employer Health Plan Market
Based in Oregon, Providence is a nonprofit, faith-based healthcare system that includes 51 hospitals and 1,002 clinics. Providence also provides health coverage, including large group plans, small group plans, self-funded ASO plans, association plans, individual and family plans and Medicare plans.
On May 20, 2026, Providence announced its plan to exit most of its health insurance lines of business as of 2027. Although Providence is working on ways to continue its Medicare Advantage and Medicaid options, it is ending its individual, family and employer group / commercial plans.
For the rest of 2026, no change to coverage is expected. Members should be able to continue using their health plan with no disruption. However, they will have to find a new plan for 2027. Small group plans will end at the end of 2026.
Understanding the Providence Exit
According to OPB, Providence has been preparing to end its health plan over the last year, with moves that included laying off some of its insurance plan staff and outsourcing some of its benefits administration to Aetna. Providence also looked for a buyer for its health plan but was unable to find one. In an email to Providence staff, Erik Wexler, CEO of Providence, cited changing state and federal regulations and increased consolidation in the health insurance sector as challenges contributing to the decision.
Becker’s Hospital Review says Providence Health Plan reported a net loss of $102 million in 2025 amid rising utilization and a drop in its Medicare Advantage star rating. The exit will affect 440,000 plan members.
How Employers Can Prepare for 2027
For individuals and families enrolled in health plans purchased through the Affordable Care Act (ACA) marketplace, the announcement does not warrant immediate action. Most people enrolled in ACA plans don’t review their coverage options until the open enrollment period at the end of the year, and that’s still months away.
For employers that use Providence Health Plan for employee coverage, the situation is somewhat more urgent. Ahead of their annual open enrollment period, companies need to compare plan options and select a new plan. This process can take time, especially when rising healthcare costs necessitate hard decisions.
Employers will need to start working with their brokers soon to decide on a new strategy for 2027. They can also use this time as an opportunity to reassess plan design, funding strategies and long-term healthcare cost management goals.
If you’re exploring health plan alternatives for 2027, Health2Business can help Portland employers and their brokers with assessing direct partnership plan solutions that support quality care, incentive-based plan design and sustainable cost savings.
Health 2 Business has developed an evolutionary direct health partnership model and partnered with Legacy Health System and thousands of local clinicians to form Legacy Direct. The program is designed to help employers and providers remove themselves from traditional insurance trends while plan members benefit from little to no cost for healthcare services. It’s a Win, Win, Win!
You may find that our Legacy Direct Partnership Plan offers the provider lineup you always wanted but never had. Now is the time to start exploring.
