Centene's headquarters in St. Louis. Credit: JMVEPhoto/Adobe Stock
Centene, a giant health insurer with about 60,000 employees, is responding to turmoil in health insurance programs and rules — and advances in artificial intelligence technology — by making a major effort to cut staffing levels.
The company is sending buyout offers to employees throughout the company and appears to be on track to layoff a large number of employees in August if too few employees agree to participate in the voluntary separation program, according to media reports and other reports.
The voluntary separation program appears to be available to employees who have worked for the company for at least two years. At least some recipients of buyout offers have been told that they must decide whether to participate by July 2.
Centene said when it posted earnings for the first quarter that it expected to spend about $20 million to $24 million on severance costs in 2026.
Representatives from Centene were not immediately available to comment on the buyout and layoff reports.
The backdrop: Centene covers about 481,000 people through traditional individual and family health insurance policies and employer-sponsored group health plans, but it is best known as a government health program supplier.
Centene covers about 12 million people through Medicaid plans, 1 million through Medicare plans and 3.6 million through individual and family policies sold through the Affordable Care Act exchange system.
Like other carriers active in the government plan market, it is facing rising health care prices, cost-conscious state and federal health program cost managers, and federal rule changes that are reducing the number of people with Medicaid coverage.
In the commercial plan market, it's facing rising health care prices, patient problems with finding in-network providers willing to take their coverage, and health care provider and policymaker hostility toward utilization management efforts, such as programs that try to reduce use of unnecessary, low-value care by requiring patients to get prior authorization from the plan before receiving certain types of health services or prescription drugs.
The administration of President Donald Trump also hit Centene hard this year by letting a temporary, COVID-era increase in ACA exchange plan program generosity expire. The expiration of the COVID-era exchange plan subsidy boost slashed the number of people eligible for subsidies and sharply reduced the generosity of the subsidies for many of the people who still have the subsidies.
And, like executives at many companies, leaders at health insurers are talking about the possibility that AI could reduce the number of people needed to handle some types of operations.
Employees of many of Centene's major competitors have been speculating actively about the possibility of layoffs on public web forums since around February, when Cigna said it was laying off about 2,000 employees and offering buyouts to others.
What it means: For employers and their benefits advisors, turmoil in the government plan market could make it easier for group health buyers and self-insured plan sponsors to get health insurers' attention.
In recent years, securities analysts who participate in the public health insurers' earnings calls have focused mainly on health insurers' Medicaid and Medicare plan operations, and executives at most companies have said little about employer plan operations.
But turmoil in big health insurers' government plan operations, company utilization management operations and company wide network management operations could eventually cause service problems for employer plans as well as the remaining government plan operations.
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