Providence is looking for a buyer for its insurance subsidiary, Providence Health Plan, the organization announced Thursday.
Providence is headquartered in Washington state and operates in seven states across the West, but its insurance division is based in Oregon and primarily does business in the state. It employs about 1,150 people and currently provides health insurance plans and benefits to some 440,000 members.
Providence sells many different kinds of insurance plans, including Medicare Advantage Plans, employer plans, individual and family coverage under the Affordable Care Act, and workers compensation services.
There have been signals over the past two years that the insurance division could get cut or spun off as part of a major reorganization.
Last year, Providence switched to a competitor, Aetna, to administer health benefits for its own staff, and laid off 84 Providence Health Plan employees.
The company’s Chief Financial Officer Greg Hoffman announced the effort to spin off the company’s insurance business in a press release and an internal email to staff.
“As we move forward, our top priority is continuity and stability,” Hoffman wrote in the staff email. “We will honor all existing contracts and ensure uninterrupted care — from both a health plan and care delivery perspective.”
As a result of the change, however, some state employees and teachers could see major changes to their health plans starting next year, in January 2027.
Providence said as a result of the effort to sell the health plan, the company will not bid on an upcoming contract to provide health care benefits for state employees and teachers through the Oregon Public Employees Benefit Board, according to the press release.
If Providence finds a buyer for its health plan, state officials could seek to place conditions on a potential sale or even block it. Oregon’s Health Care Market Oversight program has the authority to review major health care business deals to ensure they don’t increase costs or jeopardize patients’ access to doctors.
Providence said it had no details to share on timing or potential partners.
Hoffman said Providence hopes to find a buyer for the plan because it has become harder for small regional health plans to compete, citing the rising costs of prescription drugs and technology.
Hoffman, who has led Providence through restructuring and layoffs following the system’s financial struggles in the post-pandemic era, announced earlier this month that he will retire in June.
