Aegon’s Transamerica to Quit Medicare

Dutch insurer Aegon said its Transamerica Occidental Life Insurance unit will withdraw as a Medicare contractor and will close its Los Angeles-based division, cutting 560 jobs by the end of the year. Transamerica will continue operations until the federal government finds a new contractor, which could take two to three months. Workers in the downtown Los Angeles office were briefed Tuesday about the company’s plans and were told that some jobs may be available with the new contractor. Garcia said there will be no interruption of service for Transamerica’s 1.2 million Medicare patients in Southern California. Transamerica is just the latest insurer to exit the Medicare business. The government program pays for doctors’ visits and other services but in recent years it has cut the amount it reimburses insurers. Garcia said Aegon made the decision to exit the Medicare business because it was no longer a “core” business. Aegon American depositary receipts fell $1.88 to close at $69.63 on the New York Stock Exchange.