Humana Layoffs Nov. 2017: Health Insurer to Make Another 1,300 Job Cuts, Obamacare to Blame

Humana Inc (NYSE:HUM) announced it is gutting 1,300 jobs, with another 1,150 taking early retirement. The health insurance company said it is going to stop participating in the Affordable Care Act (affectionately referred to as “Obamacare”) in 2018, with the job terminations beginning at the start of that same year. Those who took voluntary buyouts will also be leaving next year.

Humana is not the only healthcare insurer to announce layoffs in 2017. A number of other companies, including MetLife Inc (NYSE:MET), Molina Healthcare, Inc. (NYSE:MOH), and AmeriHealth Caritas have announced mass layoffs to cut costs as rising healthcare costs outstrip the insurance premiums those customers have paid.

Humana to Lay Off 1,300 in 2018 as 1,150 Take Early Retirement

Humana said it is laying off 1,300 employees, or around three percent of its workforce. In an e-mail sent to workers, the Louisville-based insurance behemoth said the terminations will take place in early 2018. Those being jettisoned from their jobs have been told they can apply for other jobs at Humana.

The e-mail also said that another 1,150 took voluntary buyouts; they will be leaving in 2018 as well. Because so many agreed to take the offer, it reduced the number of jobs Humana is cutting in early 2018 to 1,300.


The insurance company said it has been taking numerous measures in 2017 to “position the company for long-term sustainable success.” This includes the buyouts that were offered in September.

Previous 2017 Layoffs at Humana

Layoffs are not rare at Humana. The company has been downsizing in 2017, and in October, it announced it is laying off hundreds of employees as it deals with the effects of its failed merger with health insurance provider Aetna Inc (NYSE:AET).

The recently announced layoffs primarily affect the Humana At Home division. Despite robust sales and earnings growth, close to 700 employees nationwide have lost their jobs as a result of the failed Humana/Aetna merger.

Humana has announced more than just two mass layoffs in 2017. Back in February, the company also announced 500 job cuts. The job losses were a result of mounting losses in the fourth quarter of 2016. The insurance giant reported a fourth-quarter loss of $401.0 million, attributed to challenges in the private “Medicare” plan market.

Together, the three announcements account for 2,500 layoffs and 1,150 early retirements.

Humana Exits ACA as Health Insurance Companies Continue to Face Losses

While Humana has not explicitly said why the layoffs were taking place now, some sources say it is because the insurance company needs fewer workers after deciding to leave the Affordable Care Act.

Just hours after calling off its merger with Aetna in February, Humana said it would exit Obamacare in 2018 because it had incurred hundreds of millions of dollars in losses. The losses soared because the healthcare costs of customers it gained through Obamacare far outweighed the insurance premiums those customers paid.

To that end, Humana also announced it is suing the federal government for $600.0 million in Obamacare-related premiums.

The mass layoffs and the lawsuit does not mean that Human is suffering. In August, it announced that second-quarter revenue rose to $650.0 million and adjusted earnings per share increased six percent year-over-year to $3.29, far above analyst forecasts of $3.08 per share.

Other Health Insurance Layoffs in 2017

In 2014, the Affordable Care Act transformed the individual health insurance industry by changing how insurance is sold and subsidized. Just not in the way many expected; insurance companies that had no previous experience under the new market conditions faced uncertainty about how to price their products.

Under Obamacare, health insurers could not take into consideration a subscribers’ health status or risk, provided subsidies for millions of people to purchase individual coverage, and created an “exchange” structure for comparison shopping.

It didn’t take long for cracks to appear in the Obamacare model. Premium rates increased more than expected and many insurers that focused on the individual market failed or are drowning in debt.

On top of that, UnitedHealth Group Inc’s (NYSE:UNH) UnitedHealthCare, the nation’s largest insurer, announced it would be leaving most of the Affordable Care Act exchange markets, due in large part to significant losses.

Most recently, UnitedHealthcare in Phoenix announced it is laying off 381 positions that support the Military and Veterans TriCare West Region contract. In May, the Department of Defense decided not to renew the contract, which ends on December 31, 2017.

MetLife said it is laying off 61 workers at its Bloomfield, Connecticut offices. Their last day of employment will be December 31, 2017. The company said the layoffs are a result of restructuring.

AmeriHealth Caritas Iowa said it is ending its contract with the Iowa government to manage Medicaid patients. The move will leave 400 workers out of work by the end of the year. The job losses are a result of soaring losses from the privately run Medicaid program. Since the plan started, AmeriHealth has reported nearly $300.0 million in losses.

In September, Molina announced almost 400 layoffs. Throughout the month, the Long Beach-based health insurer issued 13 Worker Adjustment and Retraining Notification notices with the state of California, affecting 390 employees. All of the layoffs are permanent.


Humana to lay off 1,300 workers, will let employees know about jobs by end of the week,” The Louisville Courier Journal, November 6, 2017.

Humana sues federal government for $600M,” Insider Louisville, November 6, 2017.

Humana Reports Second Quarter 2017 Financial Results; Raises Full Year 2017 Guidance; Provides Update on Bonus Year 2018 Star Ratings,” Humana Inc, August 2, 2017.

More than 300 UnitedHealthcare Phoenix employees to be laid off,” ABC15, November 1, 2017.