The departure of AmeriHealth Caritas Iowa — one of the three private insurers managing the state’s Medicaid program — means the company will lay off 400 people statewide by the end of 2017, according to an Iowa Workforce Development log of announced layoffs.
“We are committed to supporting our colleagues during this transition. All of us are extremely proud of our Iowa colleagues and all they do to make Iowa a healthier state,” the insurer said in a statement Thursday. “There are a variety of services that will be available, including salary and benefits continuation and outplacement services.
“Additionally, we are working closely with Iowa Workforce Development to explore additional services.”
AmeriHealth said that the number of affected employees is not yet determined “as other opportunities may exist” within the national organization.
Iowa Department of Human Services announced on Tuesday that the insurer would be leaving at the end of November. DHS already has posted a request-for-proposal to search for a new insurer.
AmeriHealth said it chose to withdraw from the state Medicaid program “after months of negotiations yielded no agreement on contract rates and terms,” adding it will now focus on working collaboratively with Iowa to provide a seamless transition.
All three private insurers saw large financial losses — more than $500 million collectively — during their first year of operation in Iowa, but AmeriHealth by far saw the largest. The company lost nearly $300 million, while Amerigroup Iowa reported a loss of $133 million and UnitedHealthcare of the River Valley said it lost more than $100 million.
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AmeriHealth lost another $65 million as of June 2017, according to Iowa Insurance Division financial disclosures.
Iowa was able to come to an agreement with both Amerigroup and UnitedHealthcare — raising the managed-care organization’s capitation rates, the per-member per-month fees, by 3.3 percent.
To help deal with the losses, AmeriHealth announced a series of changes in early 2017 to better control costs, including moving case-management services in-house and cutting reimbursement rates to home- and community-based services providers.
AmeriHealth has the highest number of Medicaid enrollees, with more than 213,000 beneficiaries compared with Amerigroup’s 187,000 and UnitedHealthcare’s 167,000, according to the most recent DHS quarterly report.
The insurer also has the biggest share of the state’s special-needs population — with more than 23,300 beneficiaries receiving long-term services and supports — compared with Amerigroup’s 7,700 and UnitedHealthcare’s 6,500.
Long-term enrollees include elderly Medicaid beneficiaries as well as those with disabilities receiving waiver services.
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