On December 2nd, 2025, Louisiana Medicaid Director Seth Gold stunned the state by abruptly canceling $6 billion in contracts with Aetna and UnitedHealthcare—just 12 days after lawmakers approved them. Nearly 500,000 residents suddenly faced forced insurance changes during the holiday season.
A tangled mix of lawsuits, political strategy, and pharmacy middlemen left families scrambling. What drove such a sudden, unprecedented decision? Here’s what’s going on.
What Happened on December 2nd
Medicaid Director Seth Gold sent termination letters to Aetna and UnitedHealthcare, nullifying $6 billion in combined 2026 contracts. Lawmakers learned of the move from news reports, not official notice, despite approving the contracts on November 20th. The abrupt action stunned both legislators and affected families.
No one expected this to happen so fast.
488,500 People Caught in the Crossfire
Aetna had 157,800 members and UnitedHealthcare had 330,700, totaling 488,500 enrollees forced to switch insurers in under three weeks. This represented one-third of Louisiana’s 1.57 million Medicaid population as of August 2025. The sheer scale made this unprecedented in state history.
However, the money tells an even more dramatic story.
A $6 Billion Shock
UnitedHealthcare’s $4.2 billion and Aetna’s $1.8 billion contracts comprised $6 billion in annual Medicaid spending, underpinning managed care statewide. Termination sent shockwaves through Louisiana’s health system. The contracts were central to provider payments, pharmacy networks, and claims administration.
Yet the real story wasn’t about the money—it was about why.
The Court Loss That Changed Everything
On November 21st, 2025, Louisiana lost a lawsuit against OptumRx and UnitedHealthcare over alleged Medicaid overcharges. Governor Landry filed the 2022 case. Just 11 days later, the state canceled UnitedHealthcare’s $4.2 billion contract. Observers questioned whether the termination was retaliation or a calculated response to the court ruling.
“This will take place over the next two weeks, so it will take place over Christmas,” Health Secretary Bruce Greenstein said.
What the Health Secretary Actually Said
The Christmas Quote That Revealed the Chaos
Bruce Greenstein told reporters on December 9th, 2025: “This will take place over the next two weeks, so that it will take place over Christmas. I feel confident that we will be able to execute on this.” His prior testimony suggested no reservations, raising questions about previous knowledge.
Did leadership already anticipate the December 2nd cancellations?
The PBM Problem That Started It All
Attorney General Liz Murrill filed three lawsuits against CVS Health on June 24th, 2025, alleging unfair competition, deceptive practices, and data misuse. CVS’s vertical integration through Caremark, Aetna, and its pharmacy locations created conflicts of interest, which are mirrored by UnitedHealthcare and OptumRx.
The state’s grievance over PBMs was both specific and explosive.
How CVS Used Customer Data Against Lawmakers
In June 2025, CVS sent texts to Louisiana Medicaid patients using prescription data to lobby against HB 358, banning PBM-owned pharmacies. AG Murrill alleged unlawful data use to sway legislators. Governor Landry supported the bill, which ultimately failed, leaving political wounds still open by the end of December.
By December, contract terminations had become a lever in ongoing disputes.
Why Aetna Got a Second Chance
On December 10th, 2025, Louisiana reversed Aetna’s termination after settling with CVS Health, restoring the $1.8 billion contract. UnitedHealthcare’s $4.2 billion cancellation remained. The reversal raised questions about what CVS conceded and how quickly negotiations reshaped the Medicaid landscape.
Only UnitedHealthcare remained in the state’s crosshairs.
The 330,700 Still Left in Limbo
UnitedHealthcare’s 330,700 members face automatic reassignment starting January 1st, 2026, to AmeriHealth Caritas, Elevance Health, Humana, Louisiana Healthcare Connections, or Aetna. Each insurer would absorb roughly 82,675 enrollees, totaling $1.05 billion in new contract value per plan. Families had no input in their reassignment.
But who exactly were these 330,700 people?
The Vulnerable Populations No One Was Prepared For
Among the affected, about 148,000 are children, 44.9% of the reassigned population. Most are low-cost cases, but mid-year insurance changes disrupt pediatric care, school coordination, and special education access. The timing in January amplifies challenges for families navigating education and healthcare simultaneously.
Yet children weren’t the highest-need group facing disruption.
The Highest-Cost, Most Vulnerable Population
Approximately 66,000 affected members are seniors or people with disabilities, representing 20% of enrollees but 50% of costs. Continuity with specialists and chronic care management is critical. The short transition window created acute risks for medication gaps, provider access, and winter care coordination failures.
“We remain committed to working with the Louisiana Department of Health through this transition,” UnitedHealthcare said.
What UnitedHealthcare Said (While Losing the Contract)
UnitedHealthcare stated: “We remain committed to working with the Louisiana Department of Health through this transition. We value the longstanding relationship with the state of Louisiana that has allowed us to provide access to high-quality care and coverage to more than 300,000 Medicaid members,” on December 9th, 2025.
Yet the state’s official justification remained vague.
What AG Murrill Actually Said (and Didn’t Say)
AG Murrill stated via text on December 9, 2025: “They are violating the contracts and have refused to provide us with [documents] we have requested,” and claimed that companies “are not compliant with state law.” She declined to specify which laws or documents, leaving families in uncertainty.
The working families caught in the middle had no clear answers either.
76% Were Working Families Managing the Chaos
Among affected enrollees, 76% are working, caring for family, or in school. Most juggled jobs, holiday responsibilities, and childcare while navigating insurance changes over two weeks. The timing coincided with peak consumer spending, adding stress for families forced to adjust quickly.
Yet the algorithm promised to preserve their healthcare continuity.
How the Algorithm Would Reassign 330,700 People
The Department of Health used an algorithm to reassign members to five MCOs, aiming to keep families together and maintain provider continuity based on past claims. Transparency was limited, and patients had no choice. The reassignment began on January 1st, with a 90-day voluntary transition window.
But could the algorithm really preserve doctor-patient relationships?
Why Provider Networks Might Not Align
Medicaid provider directories may overstate physician availability and are often outdated, according to Kaiser Family Foundation, August 8th, 2025. Distinct MCO networks mean members may lose access to preferred providers despite algorithmic intent. The mismatch threatens continuity of care and underlines the risk of “care limbo” for reassigned families.
The state had 17 days to solve a systemic problem.
What Happens on January 1st, 2026
On January 1st, 2026, all UnitedHealthcare members will be algorithmically reassigned. The 90-day voluntary window allows plan changes, but urgent care cannot wait. Rural members face pharmacy deserts and switching costs. The state expects a transition normally requiring 3–6 months to complete in four weeks.
The financial ripple effects extend far beyond patients.
Who Wins, Who Loses in the Redistribution
Each MCO absorbs roughly $1.05 billion in new revenue and 82,675 new members, straining administrative and provider capacity. Rural pharmacies may lose volume. CVS retains influence through Aetna, limiting reform impact. The sudden influx poses challenges for providers, while families risk disruptions to continuity.
The broader question remains unanswered.
What This Crisis Reveals About Healthcare Power
Louisiana’s $6 billion termination highlights how Medicaid contracting can be weaponized: court losses prompt contract terminations, PBM disputes drive cancellations, and vulnerable populations face disruptions in care. Governor Landry’s anti-PBM agenda, AG Murrill’s lawsuits, failed HB 358, and the November court loss culminated in the unprecedented December 2nd action, affecting 488,500 people.
The 330,700 still facing reassignment embody both crisis and cautionary tale.
SOURCES
Louisiana Abruptly Cuts Two Medicaid Contracts, Putting Care Options for 488,500 in Limbo. Yahoo News/Louisiana Illuminator, December 9, 2025.
Louisiana Ends Major Medicaid Contract 3 Weeks Before Coverage Starts. KPEL News 96.5, December 8, 2025.
Louisiana Attorney General Sues CVS for Unlawful Practices. Reuters Legal, June 24, 2025.
Louisiana Cuts UnitedHealthcare Medicaid Contract Affecting 330,000 Enrollees. Becker’s Payer, December 9, 2025.
Medicaid Managed Care Network Adequacy & Access: Current Standards and Proposed Changes. Kaiser Family Foundation, August 8, 2025.
LDH Announces Update to Medicaid Managed Care Contract Renewals for 2026. Louisiana Department of Health Official Announcement, December 11, 2025.