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Massachusetts’ second largest health insurer, Point32Health, laid off an additional 254 employees earlier this week in a second round of layoffs amid financial pressure from medical and pharmaceutical costs. The latest cuts represent 6.7% of the company’s workforce of more than 3,700 people, The Boston Globe reports. The cuts follow 110 layoffs implemented in March. Read more: ChatGPT for genetics: Boston AI startup combines DNA, search engines and primary care Point32Health, the parent company of Harvard Pilgrim Health Care and Tufts Health Plan, said the reductions aim to control administrative expenses while medical care costs continue climbing. “Our members are at the center of everything we do, and it is critical that we address costs within our control,” Chief Executive Patrick Gilligan told The Globe in a statement. “As responsible stewards of our members’ health care dollars, we will continue to manage our administrative costs as effectively as possible as we navigate the ongoing industry challenges.” Point32Health did not immediately respond to a request for comment. Read more: Caring Health Center opens new site after last was damaged by out of control driver The workforce reductions come as Point32Health, which insures nearly 2 million people, reported a $96 million operating loss on $4.9 billion in revenue through June, The Globe reports. The company attributed the losses primarily to high spending on expensive medications including GLP1s, targeted immunomodulators like Skyrizi and Dupixent, oncology drugs, and treatments for cardiac amyloidosis. According to The Boston Business Journal, rising medical costs such as prescription drug costs, hospital prices and economic conditions have all contributed to health insurance company hardships. Read more: Major retailer to hire 5,000+ employees in Mass. ahead of the holidays Glenn MacFarlane, Point32’s interim CFO, told the outlet earlier this month that insurers increase premiums to help combat those costs but often have underestimated the increased drug costs thrown their way. “The trend has caught every major health company by surprise,” MacFarlane told the outlet. GLP-1 drugs such as Ozempic and Wegovy surged in popularity in recent years and health care insurance companies say they’ve contributed to increased health care spending. Read more: Mass. hotel to lay off all staff and close — then be replaced by 300 apartments Point32 spent $70 million on GLP-1 drugs in 2024 alone, while Blue Cross Blue Shield of Massachusetts attributed 20% of its total pharmacy costs on these drugs last year, The Boston Business Journal reports. While Blue Cross Blue Shield has not initiated layoffs yet, the company admitted it could be a possibility in the future. Sarah Iselin, CEO of Blue Cross Blue Shield of Massachusetts, told the Business Journal layoffs are not off the table and was even offering voluntary buyouts to roughly 750 workers.
