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Loss of state Medicaid contract deals another blow to UnitedHealth

Layoffs for workers in Delaware follow hundreds in Phoenix earlier this month after loss of TriCare contract.

Beth Jones Sanborn, Managing Editor

The loss of government contracts continues to spawn layoffs within UnitedHealth Group and UnitedHealthcare.

This week, layoffs for 138 people in a Newark area office were announced after the organization lost its contract to provide Medicaid services in Delaware. Though some could be rehired elsewhere within the organization, a company official said they are actually working with other area competing insurers to find jobs for the affected workers.

[Also: UnitedHealthcare layoffs linked to loss of military contract]

"UnitedHealthcare Community Plan employees are serving members fully through the completion of our contract. We are supporting each affected employee in exploring other employment opportunities within our organization or with partners if they wish."

The announcement from the Delaware Department of Health and Social Services came in September that UnitedHealth would no longer operate the state's Medicaid Managed Care program. Currently, UnitedHealth and Highmark Health Options Blue Cross Blue Shield run the program, which serves about 200,000.

[Also: UnitedHealth Group says earnings rise 32% on Medicare growth]

UnitedHealth serves about 180,000 people in the state of Delaware across Medicare, Medicaid and employer-sponsored plans, but does not participate in the state's healthcare insurance exchange.

As of Jan. 1, Highmark and Amerihealth will operate the program, a local report said.

Another big blow to the company came earlier this year when the Department of Defense yanked a TriCare contract to be managed support for military and veterans in Arizona. The effects became clear this month when more than three hundred layoffs were announced for UnitedHealthcare workers in Phoenix. The cuts are specifically related to 381 positions with the Military and Veterans TriCare West Region contract.

The contract officially expires December 31.

"In the wake of DOD's decision, UnitedHealthcare is helping affected employees get new jobs internally, and remains committed to having a substantial presence through our other services in the state of Arizona," spokesperson Jessica Buechler said.

Twitter: @BethJSanborn
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