Louisiana terminates Medicaid contract affecting 345,000 individuals. Here’s why it’s significant.

Louisiana Cancels Contract with UnitedHealthcare

Louisiana has opted to cancel its agreement with UnitedHealthcare, which currently provides Medicaid insurance to around 345,000 residents, just weeks before the contract was set to take effect next year.

The Louisiana Department of Health has announced that members enrolled in UnitedHealthcare plans will be moved to other available options.

In a letter dated December 2, Medicaid Director Seth Gold informed the Department of Health Insurance that they would not be renewing the contract, which is set to expire on December 31.

“The transition process to transfer Medicaid members to alternative managed care plans will begin on January 1, 2026,” the letter stated. “We expect that UnitedHealthcare will adhere to all current agreement terms with the Department until the contract expires, and we anticipate their full cooperation in helping members transition to new plans.”

Interestingly, the letter didn’t elaborate on the reasons for this decision.

Right now, Louisiana is working with six different companies to deliver health insurance to low-income families through its Medicaid program.

The contract with UnitedHealthcare is the second largest among them, projected to be worth roughly $4.2 billion for the upcoming 2026 calendar year while serving about 344,614 members, according to mid-November data shared with lawmakers by the Department of Health.

The Department of Health is also weighing the possibility of terminating another contract with Aetna, a subsidiary of CVS, as reported by a local newspaper.

Additionally, there is a one-year contract valued at around $1.9 billion that currently covers 165,163 individuals, which the Ministry of Health announced they plan to renew.

“After discussions with the State of Louisiana and Aetna Better Health of Louisiana, LDH has decided to renew its Medicaid managed care organization contract with Aetna for the 2026 calendar year,” noted a December 9 letter from the state Medicaid director.

It seems like the state made a recent decision to end its arrangement with UnitedHealthcare.

On November 20, Health Secretary Bruce Greenstein along with other health officials urged lawmakers to extend Medicaid contracts with all six health insurance plans, including both UnitedHealthcare and Aetna. There was no indication during that meeting that any contracts would be canceled.