More than 140,000 low-income people in Marion and Polk counties may not be able to book appointments at Salem Health next year.

PacificSource Community Solutions told members in a letter sent Thanksgiving week that Salem’s only hospital system could soon be out of network. The not-for-profit insurance company administers the Oregon Health Plan in a number of Oregon counties, including Marion and Polk.

“Salem Health may leave our network on January 1, 2026,” the letter read.

Salem Health is the largest provider in the city, operates the only hospital in Salem and also operates West Valley Hospital in Dallas. Its providers include family medicine, urgent care, cardiology, obstetrics and gynecology, orthopedics, urology and more.

The letter is the latest blow to people in the Salem area who depend on the Oregon Health Plan, the state’s Medicaid program, to receive health care.

Several months ago, Mark Edwards got a letter in the mail telling him that, starting in January 2026, he’d no longer be able to see his doctors at Salem Clinic. That was after the clinic and PacificSource failed to reach a contract to cover most Oregon Health Plan patients in network.

So, he prepared. He spent two weeks scheduling appointments to catch up on all his medical screenings and checkups at Salem Clinic, visiting his endocrinologist and his internist of around 15 years.

Edwards, who has had two heart attacks and a stroke, also sees specialists at Salem Hospital to help prevent repeat incidents. Now, he may again have to find new care.

“Every specialist I see is now leaving PacificSource. And I don’t understand why,” Edwards said.

Around a third of the population of Marion and Polk counties are insured through PacificSource’s Oregon Health Plan, according to data from the Oregon Health Authority. As of October, the two counties have about 144,000 patients enrolled who don’t receive Medicare.

On Monday, Salem Health announced that they’d reached agreements with PacificSource for patients on commercial insurance and on Medicare, which is the federal program for people age 65 and older. The health system said negotiations for Oregon Health Plan patients were ongoing. PacificSource announced the same on Tuesday.

The contract for PacificSource’s Oregon Health Plan patients is set to expire on Dec. 31, said Lisa Wood, spokeswoman for Salem Health in an email. Wood said that “open card” patients on Medicaid who aren’t members of the PacificSource Community Care Organization will not be affected by the negotiations. 

Emergency care would still be covered for out-of-network patients, as protected by federal law. But out of network patients won’t be able to make appointments for routine checkups or see specialists at Salem Health’s hospital or clinics.

Wood could not set up an interview with Salem Health to answer further questions about the situation ahead of Salem Reporter’s deadline, she said.

Amber Conger, spokeswoman for PacificSource, did not respond to Salem Reporter’s request for an interview.

“At this time, our focus remains on finding a solution with Salem Health. If circumstances change, PacificSource will communicate directly with members, providers, and community leaders, and provide support to ensure continuity of care,” Conger said in an email. 

Neither shared details of what parts of the contract were in dispute.

If the two parties don’t reach an agreement, it will be the largest blow so far to Oregon Health Plan coverage in Salem amid a year of shrinking options. It comes as rising housing and food costs put additional pressure on the low-income people who use the health care program. 

Earlier this year, PacificSource announced it would pull out of administering the Oregon Health Plan in Lane County starting Jan. 1, saying the amount the state pays it to cover patients isn’t keeping up with rising costs for care. Its CEO Dr. John Espinola told the Lund Report that the move was “a canary in the coal mine moment.”

Salem Health has previously said that the Medicaid payment system is straining existing resources. In January, CEO Cheryl Wolfe said over 1 in 4 of the hospital’s patients is insured through the Oregon Health Plan. She said Oregon Health Plan reimburses about 60% of what it costs to provide maternity care. In the 2023 fiscal year, that was a difference of over $66 million dollars.

Health care rates are also impacting the private sphere. This year, Salem Health stopped accepting Regence BlueCross BlueShield insurance after failing to reach an agreement. Salem Health said it had asked for a 35% rate increase to keep up with inflation, while Regence indicated it offered a 3.4% increase aligned with a state cost growth target for the year. Neither party moved far from those figures over weeks of negotiations before they ultimately ended without a contract in place.

PacificSource took over coordinating the Oregon Health Plan in Marion and Polk counties after the Willamette Valley Community Health coordinated care organization stepped down in 2019. The company receives money from the state to pay for care for Oregon Health Plan patients.

“We understand Oregon Health Plan (OHP) members are concerned about contract negotiations between PacificSource and Salem Health. Right now, there are no immediate changes for OHP members. Oregon Health Authority’s top priority is maintaining access to health care services. As we gather details, OHA remains committed to providing accurate and timely updates to members and providers,” said the Oregon Health Authority in a statement emailed to Salem Reporter.

Edwards was among the 10,000 Oregon Health Plan primary care, urgent care and endocrinology patients at Salem Clinic who began looking for other options earlier this year, when the clinic informed them it could not reach an agreement with PacificSource. The clinic will continue to see Medicaid patients for obstetrics and gynecology.

Both Edwards, 54, and his wife were longtime patients at Salem Clinic. She was able to stay at Salem Clinic as a Medicare patient.

“I’m on PacificSource. I have to go where they go,” he said.

He worked with his doctor to ensure prescription refills for the next year. Transportation to specialists outside Salem will be a challenge. His wife uses a motorized wheelchair, he has a foot brace and the couple has relied on Cherriots’ LIFT service for over a decade.

“There is no other endocrinologist in Salem,” Edwards said. “The closest endocrinologist is going to be Portland. So now they’re going to pay for transportation up to Portland. How’s that cost effective?”

If he loses access to Salem Health, it will add to his challenges accessing health care.

“It’s stupid. It’s crazy. It’s asinine. Where am I supposed to go if I have another stroke? Another heart attack?” he said. 

He feels that he’s lost the personal connection and relationships he’d built with his local doctors over the years.

He liked his longtime internist at Salem Clinic, a former military doctor who was honest and direct. 

When he had a heart attack about a decade ago, Edwards said Salem Hospital bought him a blood pressure cuff, and sent it home with him free of charge to help prevent another heart attack.

“All the doctors know that one of the big things with my blood pressure is stress. When they catched wind that my mom died, everybody called. I got cards in the mail. I got prescriptions sent in for smoking cessation and anxiety stuff. They were all over it. I didn’t call them, I didn’t reach out to them, they just heard from my wife that my mother died,” he said. 

Edwards said he’s felt that his doctors have listened to him, and will take the time to figure out how to solve his problems.

“Yet the insurance company, all I get from them are these denials, headaches,” he said. “I have to call and complain and wrestle cages. I have to stay on top of the insurance. That’s one of my biggest jobs.”

Edwards is also concerned about the impact of incoming federal cuts to the insurance plan under the “One Big Beautiful Bill.” He’s concerned he may lose insurance altogether. Already, he and his wife had to go back into “survival mode” when food stamps were delayed in October. 

He said he hopes that Salem Health and PacificSource can come to an agreement. He’s not sure how he and thousands of others will be able to fit in at the smaller clinics in town, or if everyone will be driving up Interstate 5 for appointments.

Edwards spent his childhood in the 1970s driving from Toledo, Oregon to Oregon Health and Science University. He’d race wheelchairs around the hallways waiting for his older brother, who is paraplegic, to get out of surgery in the only place equipped to care for him, a long car ride away. 

“I just thought we were past that, in the 21st century,” he said. “You expect this in Toledo and Newport. The fact that it’s happening in our state capital is pathetic. We should be doing better. I don’t know what the answer is. I honestly don’t. The money’s gotta come from somewhere, but where do you get it? Nobody wants to pay it.”

Contact reporter Abbey McDonald: [email protected] or 503-575-1251.

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Abbey McDonald joined the Salem Reporter in 2022. She previously worked as the business reporter at The Astorian, where she covered labor issues, health care and social services. A University of Oregon grad, she has also reported for the Malheur Enterprise, The News-Review and Willamette Week.