By Amina Niasse and Sneha S K
June 15 (Reuters) - U.S. health insurer Centene said on Monday it will offer buyouts to employees following steep losses in its health plan membership over the past year driven by weakening enrollment in its Obamacare offerings.
A spokesperson for St. Louis-based Centene said the company is offering the separation packages to "support employees who may be considering a transition." Bloomberg first reported the program, saying the company is planning to offer buyouts in an effort
to cut costs in its Obamacare business.
Centene's revenue during this year's first quarter fell 6% in its commercial business, largely due to weakening enrollment for its Obamacare plans, according to the company's 10-Q filing.
Shares of Centene closed down 2.75% in trading on Monday.
Centene employed 61,000 people as of the end of this year's first quarter. In addition to its commercial business, the company operates Medicaid plans for low-income Americans and Medicare Advantage plans for adults aged 65 and older on behalf of the government.
Centene said the buyout program is intentionally designed to make most employees eligible, but the company does not expect most people to apply. A company spokesperson expected the buyouts to have an incremental impact on Centene's workforce.
Americans this year are dropping off Obamacare plans, as many who are facing the end of extra subsidies created during the COVID-19 pandemic struggle to make payments. Congress failed to pass legislation extending these enhanced subsidies.
Centene in a filing said the expiration of the subsidies introduced uncertainty around 2026 enrollment.
At the end of this year's first quarter, Centene had a total health plan membership of about 26.3 million people, down 6% from the same quarter a year prior. Company CEO Sarah London, during a first-quarter earnings call, said decreases in Centene's Obamacare membership had created a sicker mix of patients, raising medical costs.
KFF data showed 23 million people signed up for the plans, established under the 2010 Affordable Care Act signed by President Barack Obama, during the open enrollment period for 2026 coverage, down from 24.2 million who signed up the year prior. In some states, cancellations have increased by as much as 200%.
(Reporting by Sneha S K in Bengaluru and Amina Niasse in New York City; Editing by Joyjeet Das and Will Dunham)
