UNITED HEALTHCARE: Won’t Renew Texas ERS Contract
United HealthCare will not renew its contract with the Texas Employee Retirement System (ERS) after the two sides failed to agree on a pricing structure. United spokesperson Betsy D'Acierno said, "They wanted things that we couldn't deliver at that price. We couldn't agree on pricing. We couldn't come to an agreement, but that's the insurance business." The ERS "administers health benefits to state employees and retirees." The San Antonio Business Journal reports that the current contract expired August 31, ending a relationship dates back to 1987. The decision not to renew will affect approximately 14,000 beneficiaries statewide, including about 6,500 in the Austin/San Antonio region. An ERS official noted that the state program contracts with 21 other health plans (Turner, 9/7 issue).
United has laid off 60 people across California, including its entire Sacramento sales and marketing staff, as the health plan moves to consolidate those offices in San Francisco. United is attempting to cut 4,000 positions nationwide in the next two years as a result of a $565 million second-quarter loss. The HMO had already laid off 28 people in Sacramento in April. Henry Loubet, CEO of United's Western Region, said, "It's really a national issue. It's part of a realignment throughout the country to focus on core markets and improve profits. We need to control costs" (Robertson, Sacramento Business Journal, 9/7).