PacificSource Health Plans, which provides both commercial and government-sponsored health insurance coverage in Central Oregon, is partnering with the Portland-based health care provider Legacy Health.

Legacy, which operates five hospitals and a number of clinics primarily in the Portland metro area, on Thursday purchased a 50 percent member interest in Springfield-based PacificSource for $247.5 million paid over the course of five years. Oregon’s insurance commissioner approved the partnership earlier this summer.

The idea is to create a new entity that provides both medical care and insurance in an integrated fashion, much like Kaiser Permanente and Providence currently do. Most of that, at least in the near future, will take place in the Portland area, where PacificSource policyholders can access Legacy providers.

PacificSource’s policyholders in Central Oregon likely won’t notice changes under the partnership, said Ken Provencher, PacificSource’s president and CEO. The company will maintain its “strong” relationships with St. Charles Health System, Bend Memorial Clinic, Mosaic Medical, High Lakes Health Care and other providers, he said.

“I think it really strengthens us and makes us a very long-term player,” he said.

That’s important at a time when health insurance carriers are struggling now that the Affordable Care Act precludes them from denying coverage to sick people. Oregon’s health insurance carriers lost a collective $217 million in 2015 and $36 million in 2014, mostly due to the volatile individual market. That’s led several carriers to fold, pull out of the Oregon market or decrease the number of Oregon counties in which they do business.

For its part, PacificSource is increasing the average monthly price of its individual policies, for those who buy for themselves or their families, by 15.2 percent next year.

The partnership also won’t affect coverage for Oregon Health Plan, or Medicaid, clients. PacificSource Community Solutions, the arm of the company that administers OHP in Central Oregon, is separate from the arm Legacy is purchasing, Provencher said.

PacificSource receives money from the state to administer care for Medicaid clients. Any profits it makes beyond 2 percent go back to a regional governing board.

“All of that will remain in place,” Provencher said.

PacificSource, which will remain not-for-profit under the partnership, currently employs 210 people in Central Oregon. That’s roughly double the number the company employed locally when it purchased the Bend-based health insurer Clear One in 2010, Provencher said. Over time, Provencher said the partnership may prompt the company to hire more people in Central Oregon.

Of the total purchase price, Legacy will pay $100 million up front and the rest in five annual payments of $29.5 million, according to an Oregon Department of Consumer and Business Services order approving the partnership. PacificSource will create a new nonprofit corporation governed by its current board members and Legacy representatives that will hold the company’s remaining interest.

— Reporter: 541-383-0304,

tbannow@bendbulletin.com