CALIFORNIA — L.A. Care Health Plan notified the California Employment Development Department (EDD) that it plans to lay off 225 employees by March 13.
L.A. Care — formally the Local Initiative Health Authority for Los Angeles County, is a publicly governed health plan that administers Medi-Cal and other coverage programs in Los Angeles County.
In a November 2025 Facebook post, L.A. Care’s Senior Medical Director, Dr. Michael Brodsky, warned that California’s proposed $714 million Medi-Cal cuts could trigger layoffs and reduced services, leaving vulnerable communities without care.
California’s 2025‑26 budget implemented significant Medi-Cal reductions due to federal funding shifts and state deficits, including eliminating some payments and delaying benefits for undocumented immigrants. Projections indicate millions could lose coverage.
The $714 million figure specifically targets proposed cuts in behavioral health services.
An L.A. Care spokesperson said the workforce reduction was a difficult decision to ensure high-quality service and uninterrupted coverage for members.
“This restructuring is intended to strengthen critical capabilities and position us for the future. It includes new roles designed to support the execution of our strategic vision,” said the company official.
Insurance sector job losses in 2025
Recent layoffs and restructuring in the health-care payment and insurance sector reflect broader economic pressures and industry-wide workforce adjustments.
In 2025, the insurance sector experienced its first year of job losses since the pandemic, according to Bureau of Labor Statistics data released January 9.
The sector lost nearly 28,000 positions, marking the first annual decline since 2020, when insurers cut about 21,000 jobs and the sector’s unemployment rate peaked at 4.8%.
In California, Blue Shield of California laid off over 400 employees in 2025 to reduce administrative costs, streamline operations, and adapt to hybrid work models.
UnitedHealth Group’s Optum subsidiary filed a WARN notice in the state to lay off 524 employees between September 16, 2024, and January 2025, affecting nurse practitioners, registered nurses, medical assistants, patient care coordinators, and remote staff.
Kaiser Permanente reduced staff in late 2025, laying off around 216 workers, primarily in IT, business operations, and food services, as part of cost-cutting measures.
L.A. Care plans to automate claims processes
While specific departments were not publicly detailed for the L.A. Care layoffs, the CEO indicated a focus on leveraging technology, including automating claims processes and supporting call center agents with better technology.
RELATED: Historic California art college to close as Vanderbilt prepares to take over campus
 that it plans to lay off 225 employees by March 13.){kind=link}