Lawmakers, advocates worry ending Medicaid contract could create care gaps

By Julie O’Donoghue
Contributing Writer

(lailluminator) — Several Louisiana senators and health care advocates are aghast at Gov. Jeff Landry administration’s decision to abruptly cancel a massive contract providing health insurance to hundreds of thousands of Medicaid recipients.

“It’s unwarranted. It’s unnecessary and it fails the people we serve in that program,” Senate Democratic Caucus Chairman Gerald Boudreaux, D-Lafayette, said in an interview Tuesday.

Legislators in both political parties said they were blindsided this week when they learned the Landry administration terminated a $4.2 billion agreement with UnitedHealthCare to provide Medicaid coverage in 2026. Lawmakers, hospitals and other health care providers said they weren’t given any notice of the governor’s decision in advance.

UnitedHealthCare pro-vides health insurance for 330,700 Louisiana residents and holds one of the largest contracts in state govern-ment. Without a deal in place, its participants will have to be moved into other Medicaid plans before Jan. 1.

Lawmakers and ad-vocates questioned whether such a big shift is feasible over a short period of time, especially with the holidays approaching. Many said disruptions in health care will be inevitable.

“We are going to have problems. We are going to have people who fall through the cracks,” Senate Pro Tempore Regina Barrow, D-Baton Rouge, said in an interview last week. “We are going to have people who are not going to get health care.”

All Medicaid plans not the same, advocates say
The remaining organiza-tions that provide Medicaid coverage for the state are Aetna, AmeriHealth Caritas, Healthy Blue, Humana Healthy Horizons and Louisiana Healthcare Connections.

The Louisiana Depart-ment of Health plans to use an algorithm to help pick a plan for each person who needs to switch from UnitedHealthCare, Health Secretary Bruce Greenstein said in an interview this week.

It will prioritize keeping families together with the same health care company and making sure the doctors and other medical professionals a person sees most frequently take their new insurance.

“This will take place over the next two weeks, so it will take place over Christmas,” Greenstein said on last week. “I feel confident that we will be able to execute on this.”

If a Medicaid recipient is unhappy with their new health care coverage, they will have 90 days starting Jan. 1 to switch into another plan, Greenstein said.

Health care advocates and legislators said they aren’t convinced the transition will go so smoothly.

UnitedHealthCare covers one quarter of the 1.4 million people who receive insurance through a Medicaid managed care organization. Only Louisiana Healthcare Connections, with 362,600 enrollees, has a larger share of enrollees.

When the health department has tried to switch large numbers of people from one Medicaid plan to another in the past, advocates said it has taken several months. Having such a massive change take place over the holidays will likely cause confusion, they said.

“That isn’t a good time to make a change involving hundreds of thousands of people,” said Peter Robins-Brown, executive director of Louisiana Progress, an advocacy group for low-income people.

UnitedHealthCare cover-age is also widely accepted by doctors, hospitals and other health care providers. Many of the remaining health care plans have more limited provider networks, especially in rural areas, said Katie Corkern, an advocate for mental health care and people with disabilities.

Corkern said she also worries there will be gaps in services after people switch into new health care plans and have to seek a new round of prior authoriza-tions for medical treatments.

Health insurers use prior authorization to review whether an enrollee requires the care or treatment they are seeking. They won’t agree to pay for certain services until prior authorization is granted. Prior authorization procedures differ among companies, and that status doesn’t automatically transfer when a patient has a new insurance plan.

It’s also not clear that the five remaining health care plans have enough doctors, hospitals and other medical providers who take their insurance to absorb potentially thousands of new patients, said Jan Moller, executive director of Invest in Louisiana, a left-leaning organization that works on state tax and budget policy.

“Sometimes, it can be hard for Medicaid beneficiaries to find doctors and other providers who will treat them,” Moller said. “How are we going to make sure we have enough doctors in our [remaining] networks to provide everything we need?”

Lack of communication
Lawmakers are bewild-ered as to why the UnitedHealthCare contract is being dropped so suddenly.

At the urging of the Landry administration less than a month ago, legislators approved UnitedHealth-Care’s Medicaid contract for 2026 alongside five others. No concerns about the company’s services were brought up by the governor’s team during a nearly three-hour hearing Nov. 20.

State Medicaid director Seth Gold then sent a short letter to UnitedHealthCare less than two weeks later telling the company its contract was ending on December. 31.

“I’ve spoken to senators from both parties, and they have significant questions about what has evolved since the last [legislative] meeting that would force or require [the Louisiana Department of Health] and the administration to cancel,” Senate President Cameron Henry, R-Metairie, said in an interview on Tuesday, December 9.

The Senate Insurance Committee and Senate Health and Welfare Committee are holding a joint hearing Tuesday to discuss the canceled contract with Attorney General Liz Murrill and state health officials.

“Hearings need to be held to determine how this decision is made and why it is made and the ramifications,” said Sen. Thomas Pressly, R-Shreve-port, who sits on the Health and Welfare Committee and voted to approve the UnitedHealthCare contract last month. “It needs to be on the record so people understand what’s going on.”

Problems with litigation
Murrill and a recent setback for her in a state lawsuit against UnitedHealthCare appear to have played a major part in the contract termination.

She sent a letter to Greenstein, the health secretary, on Dec. 2 urging him not to renew the UnitedHealthCare agreement because of the company’s “ongoing noncompliance with its contractual obligations.” That same day, the health department, which Greenstein leads, sent notice to UnitedHealthCare abruptly canceling its 2026 extension.

In her letter to Greenstein, Murrill said UnitedHealth-Care and its pharmacy benefits manager, OptumRX, has failed to turn over full access to its pharmacy claims processing system, which she alleges is required by its existing state contract.

This claim is also the basis for the state’s years-long lawsuit against UnitedHealthCare, which Landry initially filed in 2022 when he served as attorney general.

Landry and Murrill, who took over the lawsuit when she became attorney general in 2024, have more broadly alleged in the lawsuit that UnitedHealth-Care and OptumRX overcharged the state Medicaid program for prescription drugs. The company has denied wrong-doing, saying it is in compliance with all state laws.

Last month, the state lost a crucial court battle regarding the lawsuit. The Louisiana First Circuit Court of Appeal ruled against Murrill on Nov. 21, the week before Thanksgiving and 11 days before she sent the letter to Greenstein.

The timing of the appellate court’s decision may explain why legislators were caught off guard by the contract termination. The ruling came out the day after legislators voted to renew UnitedHealthCare’s agreement. It’s not clear whether Murrill had raised objections to Greenstein and state health care officials before the court decision and that vote took place.

The appellate court ruling also isn’t directly related to the merits of the lawsuit. It has to do with a side issue regarding how the attorney general had structured her contract with the private law firm, Salim-Beasley of Natchitoches, that is handling the case against UnitedHealthCare for the state.

UnitedHealthCare has alleged in court that Murrill’s contract with Salim-Beasley violates state law. The company says the legal arrangement is too similar to a contingency fee contract, in which attorneys are only paid from the financial damages or settlement dollars awarded to the state if they win a case.

The attorney general is only allowed to hire attorneys on a contingency fee basis if she received approval from the legislature to do so, according to state law.

Murrill’s attorneys have argued the Salim-Beasley contract doesn’t have to meet this requirement because its payment wouldn’t come directly from an award of damages or settlement the state receives. It would be given out separately from UnitedHealthCare under a judge’s direction and therefore is not a contingency fee contract.

But the appellate court concluded UnitedHealth-Care’s argument over the Salim-Beasley contract may have merit and needs to be heard in the lower district court before the state’s lawsuit can move forward.

Murrill said the court fight is a factor in wanting to cancel UnitedHealth-Care’s contract.

“United has engaged in frivolous attacks on the AGs contracting authority as well, in an attempt to divert attention away from the issues,” she wrote in a text message to a reporter last week.

This article originally published in the December 15, 2025 print edition of The Louisiana Weekly newspaper.