UnitedHealth Group layoffs led to 138 employees being cut from its office near Newark, Delaware, due to a Medicaid contract loss that forced the company to reduce its presence in the state, hurting an already struggling Delaware.
UnitedHealth Group Inc (NYSE:UNH) had also cut jobs in Arizona early this month. The total UnitedHealth Group layoffs in November number 519, with 381 Arizona job cuts.
The cuts come after the Delaware Department of Health and Social Services announced in late September that it would not renew its contract with UnitedHealth to operate the state’s Medicaid Managed Care Program in 2018.
The move will reduce the number of UnitedHealth employees in Delaware to 122. However, The News Journal reports that the company is in the process of seeing if it can transfer some of the laid-off UnitedHealth Group workers into other positions within the company, including telecommuting jobs that are open. The company is also working with competing health insurers to help find jobs for some of the laid-off workers.
At the moment, UnitedHealth and Highmark Health Options Blue Cross Blue Shield run the insurance program, serving 200,000 people, but that is all set to change in 2018 when UnitedHealth will no longer be involved with the contract. Amerihealth will take over its responsibilities come January 1.
Aside from its expiring contract work, UnitedHealth also sells health insurance to about 180,000 people in Delaware. The company also offers Medicare services as well as employer-sponsored plans, reports The News Journal.
What UnitedHealth does not do, however, is sell insurance on the Affordable Care Act-mandated Delaware health care exchange.
The company, despite the cuts and the loss of the contract in the state, is doing well. It has registered a 33% growth in its stock value over the course of 2017.
The company also reported $185.0 billion in global revenue through 2016.
In sharp contrast to the success of UnitedHealth is Delaware, a state that has struggled in this economy.
The state’s GDP changed little in 2016, growing at a paltry 0.1%, the lowest figure among states in the area.
While 2017 began with a promising start, showing accelerated growth in the first three months, it fell again during the summer months when Delaware registered the third worst economic performance of any state in the union, according to data from the Bureau of Economic Analysis.
Another hitch is the Delaware job market, which has also shown weak numbers of late, hitting 4.9% in August, a two-year high, according to data from the state Labor Department.
This shows an intersection between two hot-button issues in the U.S. in 2017: health care and unemployment.
While Congress has repeatedly squabbled over the future of the ACA, otherwise known as Obamacare, the needle has yet to truly move in any direction on the health care policy. Efforts by the Republican House and Senate have been unsuccessful in repealing the Act.
Meanwhile, many are concerned about how their premiums will be affected as insurance companies continue to operate in an atmosphere of uncertainty. Consumers are paying the price for Congress’s tough talk but failed action.
Alongside the health care battle is the state of U.S. employment. While some sectors have experienced growth, others have languished in stagnation or are downright shrinking, like retail jobs, which have been hit hard across the country.
Delaware’s position of hitting two-year highs in unemployment combined with its stagnating economy may end up costing the state even more workers as time goes on if things don’t turn around for the region.
“UnitedHealth cuts 138 Delaware jobs after it loses Medicaid contract,” The News Journal, November 27, 2017.