The decision by insurance giant Humana to pull out of all Obamacare marketplaces in 2018 isn’t the only news to come out of the company this week.
After suffering $400 million in fourth-quarter losses, the company issued a statement that it would be laying off 500 employees from the home health division come springtime. The majority of these layoffs would take place in Ohio and Florida.
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This continues the efforts by many insurance companies to offset the losses of participating in the Obamacare public exchanges. Humana asked the federal government for permission to hike its premiums by 39 percent this year in Ohio and 36.8 percent in Florida. The company also canceled its merger with insurance giant Aetna after a federal court ruled the combined companies would violate antitrust laws.
However, the layoffs are unrelated to the blocked merger, according to company representatives. The bulk of the layoffs will take place in the company’s eight-year-old at-home care division, which employs nurses, nurse practitioners, support staff, and administrators to help seniors transition from care in the hospital to care at home.
“Humana is providing associates at least 60 days’ notice, severance benefits, and job placement assistance,” said Humana spokesperson Nancy A. Hanewinckel. “In some cases, these Humana At Home associates will be eligible for new roles within Humana.”
It’s unclear what effect these layoffs might have for families hoping for care for their elderly relatives at home, however. A spokesperson from the Ohio Department of Aging said it was too early to tell how these changes would affect that state. Representatives from the Florida Department of Elder Affairs declined to comment.
Almost 10 million people over age 50 are caring for their senior relatives nationwide. The number of caregivers has more than tripled in the last 15 years — and those caregivers who quit employment to care for their parents usually lose close to $150,000 in wages, not to mention lower pay when they finally return to the job market years later. Although nursing home costs are often high, keeping parents at home isn’t cheap either.
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This recent round of layoffs could diminish the support network these families sorely need to manage the long-term care for their relatives. Hanewinckel assured families that Humana’s company mission remains “helping our members living with chronic conditions maintain their highest possible quality of life.” Whether the company defines high quality life as at-home care remains unclear. It could be that families reluctant to use nursing homes may face reduced options.
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Hanewinckel also declined to comment on why the company isolated the layoffs just to Ohio and Florida.
She did say, though, that these layoffs weren’t just simple math for company executives.
“From talking with the leaders of this team, this decision was not easy for them and was the result of what they’ve learned in the eight years since we launched this division,” she told LifeZette. Although the company did cite significant losses in the fourth quarter last year, it also reported $55 billion in total revenue for 2016 — a 1.3-percent increase from 2015.
Despite the layoffs, the company will still employ about 11,000 employees in Florida alone, an increase from 6,000 employees in 2013. Company representatives also said the layoffs will not affect 2,200 workers in Cincinnati.