Blue Cross of Idaho cuts jobs as state gives contract to for-profit insurers

Blue Cross of Idaho is laying off over 100 employees in the coming months.

The nonprofit health insurer says it’s because the Idaho Department of Health and Welfare terminated a decade-long contract with it, choosing to award contracts to two out-of-state, for profit insurers instead.

Health and Welfare expects to save up to $40 million by switching from Blue Cross of Idaho to United Healthcare and Molina Health Care for the state’s Medicare and Medicaid dual-eligible program, a spokesperson told the Idaho Statesman by email.

The duals program serves about 26,000 residents enrolled in both Medicare and Medicaid — people who typically have a low income and more complex health care needs.

Blue Cross of Idaho, the largest health insurer in the state, first partnered with Health and Welfare to usher in the duals program in 2014. Health and Welfare solicited bids last year for the first time in the history of the program. Blue Cross of Idaho submitted a bid to continue with the program in 2026, but the state health department decided in December to go in a different direction.

It also chose to end Blue Cross of Idaho’s contract early. The contract, which was originally set to expire at the end of the year, will now end in June.

“United Healthcare and Molina Health Care were awarded the duals program contracts resulting from this competitive solicitation,” AJ McWhorter, a spokesperson for Health and Welfare, said. “DHW procured this contract in order to drive new initiatives forward with quality and performance, enhance care management for the duals population and drive greater cost efficiency within the program.”

That means the Blue Cross of Idaho employees who work directly on the duals program are no longer needed.

The nonprofit told the Idaho Department of Labor in a letter dated March 28 that it would close its operating unit dedicated to the duals program.

Blue Cross of Idaho plans to lay off about 135 employees between June and October, according to the letter, which the insurer shared with the Statesman. It filed a WARN notice in compliance with federal law that requires employers to give employees advance notice of mass layoffs.

“This is a decision no one at the company takes lightly and is in no way a reflection of the quality of work and care accomplished by these employees,” Bret Rumbeck, a spokesperson for Blue Cross of Idaho, told the Statesman. “They have and will continue to support the duals members with dedication and compassion in the wake of IDHW’s decision.”

Rumbeck said all affected employees have been notified of their separation dates. Some of the employees are based in Meridian and others at Blue Cross of Idaho offices around the state.

The nonprofit told the Idaho Department of Labor that it’s been reaching out to medical providers to notify them of the contract change and making arrangements with United Healthcare and Molina Health Care regarding the transition.

Founded in 1945, Blue Cross of Idaho has 583,000 members. The nonprofit is headquartered at 3000 E. Pine Ave. in Meridian.

“Blue Cross of Idaho has long been a great business partner to Idaho and its local communities,” Meridian Mayor Robert Simison said in a statement. “It is unfortunate that due to a decision by the Idaho Department of Health and Welfare to award contracts to out-of-state insurers, more than 100 Idaho jobs that served fellow Idahoans with significant medical needs are now being eliminated.”

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