SOUTH PORTLAND — The state has broken off a $7-million-a-year MaineCare contract with a subsidiary of Aetna insurance company, which told employees Tuesday it would have to eliminate 34 positions in South Portland.

State officials plan to drop some of the administrative services provided under the contract and transfer other duties such as managing care of high-cost patients to existing state staff.

MaineCare, a division of the Department of Health and Human Services, is reviewing all of its contracts because of “fiscal struggles” in the program, said acting MaineCare Director Stefanie Nadeau. The decision on the $7 million contract also reflects a long-term plan to manage MaineCare more efficiently, she said.

“The contract was up for renewal at the end of the fiscal year anyway. We were not going to continue with that service past the end of the contract,” Nadeau said.

Aetna, meanwhile, hopes to find other work for many of the 34 people affected.

“We’ve already begun talking to them about alternatives,” said Tom Kelly, president and chief executive officer of Schaller Anderson, which is owned by Aetna. “We’re hopeful we’ll get a bunch of them something else to do.”