Louisiana yanks Medicaid contract that covers 345K people. Here’s why it matters.

Louisiana has halted a contract with UnitedHealthcare to provide Medicaid coverage for roughly 345,000 people in Louisiana, less than a month before the new contract term was set to take effect.

People on the UnitedHealthcare plan will be redistributed to other plans, the Louisiana Department of Health said.

Medicaid Director Seth Gold said in a letter to the health plan dated Dec. 2 that the department will not renew its contract, which expires Dec. 31.

"LDH will begin the transition process of moving your Medicaid members to other contracted Medicaid Managed Care Plans for a January 1, 2026 effective date," the letter says. "We expect United to continue to abide by all of the terms of its current contract with LDH through the expiration date. We also expect your full cooperation with transitioning your members to their new Medicaid Managed Care Plans."

The letter did not provide a reason for the decision.

Louisiana currently contracts with six companies to provide health insurance to low-income families through the state's Medicaid program.

The UnitedHealthcare contract is the second largest of those contracts. The contract for the upcoming 2026 calendar year was projected to be worth about $4.2 billion and serve 344,614 plan members, according to mid-November data provided by the health department to lawmakers.

The health department was also considering ending another Medicaid contract with Aetna, according to the Louisiana Illuminator. But in a statement Tuesday, the health department said it planned to renew that contract.

That contract is worth about $1.9 billion and covers 165,163 people, according to the November data.

The decision to end the United Healthcare contract appears to have been made recently.

On November 20, Health Secretary Bruce Greenstein and other health officials appeared at a hearing before legislators, and they asked lawmakers to extend the Medicaid contracts with all six health plans, including UnitedHealthcare and Aetna. There was no mention that any of them would end.

This is a developing story.