Louisiana’s Medicaid changes have left hundreds of thousands of people unsure about their health care. On December 2, 2025, Governor Jeff Landry’s team ended big contracts with two companies that handle Medicaid services. This affected 488,500 people, which is 21.6% of Louisiana’s 1.53 million Medicaid users. The move came right after a court win for one of the companies, UnitedHealthcare. Families who depend on these services for kids, older adults, and people with disabilities now face big disruptions.
Fight Against Pharmacy Middlemen Sparks Crisis
The trouble started with Attorney General Liz Murrill’s push against pharmacy benefit managers, or PBMs. These are companies that act as go-betweens in the prescription drug world and control about 80% of the market. In June 2025, Murrill filed three lawsuits against CVS Health and UnitedHealthcare. She accused them of unfair business practices, hiding documents, and charging too much for drugs.
Since 2022, 100 small, independent pharmacies in Louisiana have closed because of these PBM tactics. Governor Landry called it a “rigged market” run by middlemen. On November 21, a state appeals court ruled in favor of UnitedHealthcare. The court said the state’s claims did not hold up and stopped any delays in sharing documents. Lawmakers had approved the contracts the day before that ruling. Still, the state went ahead and ended them, saying the companies did not follow state laws. Murrill denied that this was payback for the lawsuit.
Contracts Ended, But One Gets a Second Chance
Medicaid Director Seth Gold sent termination notices to Aetna and UnitedHealthcare. Aetna’s contract was worth $1.8 billion and covered 157,800 members. UnitedHealthcare’s was $4.2 billion and served 330,700 people. Both got just 10 days’ notice. UnitedHealthcare said it had fully complied with all rules and shared information as required.
These contracts totaled $6 billion a year. They sent about $500 million each month to hospitals, pharmacies, and doctors across Louisiana’s 64 parishes. Only a week later, on December 9, the state changed its mind about Aetna. Gold said Aetna could renew its contract for 2026. This happened after CVS Health, Aetna’s parent company, agreed to pay $50 million to settle all three lawsuits.
The lawsuits covered unfair trade practices, antitrust problems, and misuse of customer data in a text message campaign against a bill called House Bill 358 that fought PBM power. Aetna’s members avoided problems, but UnitedHealthcare’s group stayed in limbo. This showed how much power each company had in talks with the state.
Quick Reassignments Face Lawmaker Concerns
The state plans to move all 488,500 affected members to other plans by January 1, 2026. It will use a computer program to assign them to four remaining companies: AmeriHealth Caritas, Elevance Health, Humana, and Louisiana Healthcare Connections. Each of these will take on about 82,675 new members, a 25% increase in their size. The system will try to keep families together and let people stay with their current doctors.
Health Secretary Bruce Greenstein promised the switch would happen smoothly, even during the Christmas holidays. But lawmakers pushed back on the tight deadline. Senator Patrick McMath said health care is too complicated for such a fast change, and it could leave gaps in coverage. Senator Jay Luneau pointed out problems from past switches that took a full year.
The people affected include 44.9% children under 18, 20% seniors or people with disabilities, and 30.7% working-age adults earning less than 138% of the federal poverty level. Among adults not working, nine out of 10 have health limits from issues like cancer or strokes. By December 16, the state offered UnitedHealthcare a 90-day extension until March 31, 2026, worth $561 million. The company accepted but said it would not renew after that. It promised a smooth handover. State rules require 60 days of continued care with current providers during changes, but people in the middle of treatment might have to switch later.
Ongoing Dangers and Bigger Money Worries
Small pharmacies are hurting from low payments by PBMs like CVS Caremark and OptumRx, plus deals where these companies buy up competitors. Losing UnitedHealthcare could make them drop out of networks and speed up closures. UnitedHealthcare might owe between $388 million and $768 million, or even $1 billion, which is much more than CVS paid. That explains why one settled and the other did not.
Starting January 1, members have 90 days to pick a new plan. They must check websites and networks while the companies handle extra people. Federal cuts to Medicaid add more pressure. A June 2025 budget bill plans to cut nearly $1 trillion over 10 years. It includes work rules for some users and lowers provider taxes from 6% to 3.5% of net patient money by 2032.
After March 31, UnitedHealthcare’s 330,700 members face yet another computer-based switch. This whole story shows how court fights and company money decisions hurt everyday health care. Vulnerable people in Louisiana pay the price as these battles drag on without clear fixes.
Sources
Louisiana Department of Health (LDH), LDH Announces Update to Medicaid Managed Care Contracts for 2026, December 12, 2025.
Louisiana Illuminator via Yahoo News, Louisiana abruptly cuts two Medicaid contracts putting care options for 488,500 in limbo, December 9, 2025.
Becker’s Payer, Louisiana extends UnitedHealthcare Medicaid contract in extension through March 31, December 18, 2025.
Louisiana Illuminator via WV News, Louisiana backs off Medicaid contract termination will offer extension through March, December 16, 2025.