Two of Massachusetts’ largest nonprofit health insurers are bracing for a significant drop in revenues that could force at least one of them to cut jobs, after a state agency eliminated them from coverage options for tens of thousands of public workers. The state has offered plans from Harvard Pilgrim Health Care and Tufts Health Plan for more than three decades. But beginning in July, neither of the well-known insurers will be available to public workers who buy commercial health plans. A spokeswoman at Tufts said the insurer is still evaluating how to manage the loss of state business — and the anticipated $25 million hit on revenue — but she said some job cuts are likely. Harvard Pilgrim and Tufts are each set to lose 90,000 members. That’s about 8 percent of Tufts’ total membership, and about 7 percent of Harvard Pilgrim’s total. Fallon Health, a smaller Worcester-based insurer, is slated to lose about 20,000 members. The fallout results from a surprise move on Jan. 18 by the state’s Group Insurance Commission, which manages public health benefits, to stop offering commercial coverage from the three insurers. (Tufts will still offer Medicare plans to public-sector retirees.) The commission whittled the options for public employees down to three lesser-known insurers. Harvard Pilgrim said Tuesday that no staffing changes are currently planned, but the Wellesley company will “continue to evaluate the needs of the business and will staff accordingly.” The Boston Globe quoted an email from spokeswoman Kimberley Winn, “GIC has been a major account for Harvard Pilgrim Health Care for many years. We would have liked to continue to serve GIC and would be happy to do so again in the future.” Collectively, the insurers employ thousands of people in Massachusetts. It’s unclear how many jobs might be affected by the GIC’s decision. The state commission’s move has come under fire from public employee unions and some politicians, who say the changes were made with little public notice or debate. The commission is holding public hearings this week. State senators said Tuesday that they will hold a public oversight hearing on Jan. 31 to discuss the “abrupt” changes. Attorney General Maura Healey told the Globe that her office has been getting calls from state employees and urged the commission to reconsider. “This was a situation that was seriously mishandled,” Healey said in an appearance on WGBH radio. Officials at the state commission defended their decision and the process that led to it. They said they evaluated several factors before choosing which health plans to keep and which to eliminate. They expect their changes to save about $20.8 million in the first year of the rollout, while allowing almost all public employees and retirees to keep their doctors. The commission manages benefits for about 442,000 employees, retirees, and their families and is the lar gest purchaser of health insurance in the state. The commission has yet to detail how much employees and retirees will pay for their health plans next year. Those figures are expected next month. Three other insurers are poised to gain thousands of new members — and new revenues — following the state commission’s move. The three companies slated to benefit are Neighborhood Health Plan, a subsidiary of Bostonbased Partners HealthCare; Health New England, which is owned by Springfield-based Baystate Health; and UniCare, a division of Anthem, a publicly traded insurance company headquartered in Indianapolis. Public employees will be able to choose their own health plans, but state projections show UniCare is likely to see the highest gain in commercial members. UniCare has an office in Andover that employs about 200 people. Its network includes all Massachusetts doctors, company officials said.
