UCare health insurer shutting down: What we know
UCare will shut down in 2026 and Medica will take control of its existing health plans in the Medicaid, family and individual markets. UCare was created more than 40 years ago primarily to offer health care coverage to low-income policyholders relying on Medicaid, but has recently struggled to navigate rising healthcare costs.
MINNEAPOLIS (FOX 9) – UCare will shut down in 2026 and Medica will take control of its existing health plans in the Medicaid, family and individual markets. UCare was created more than 40 years ago primarily to offer health care coverage to low-income policyholders relying on Medicaid, but has recently struggled to navigate rising healthcare costs.
UCare shutting down
What we know:
Medica’s acquisition of UCare’s health plans was announced in a joint press release Monday afternoon.
“As a nonprofit, community-focused health plan, Medica has a long history of serving members in Minnesota, guided by our mission and trusted relationships with providers, customers and members,” said Lisa Erickson, CEO of Medica. “Now we have the opportunity to build upon both Medica’s strengths and UCare’s legacy, allowing Minnesotans to continue to have a health care experience that ensures they feel cared for.”
Both companies are Minnesota-based nonprofit Health Maintenance Organizations (HMO).
UCare was created more than 40 years ago primarily to offer health care coverage to low-income policyholders relying on Medicaid.
It currently provides health care and administrative services to more than 300,000 members throughout Minnesota and parts of Western Wisconsin.
But UCare has recently struggled to navigate the turbulent healthcare markets.
It announced earlier this year plans to cut Medicaid coverage and exit the Medicare Advantage market altogether.
Monday’s announcement punctuates a dramatic fall for UCare in recent years.
UCare reported half-billion dollar loss
By the numbers:
The HMO engaged in a turnaround plan with the state of Minnesota after reporting a net income loss of nearly $500 million in 2024.
The significant drop in revenue came just two years after UCare reported a net income surplus of $325 million.
UCare acknowledged the surplus was likely an outlier because of unique circumstances attributed to the pandemic.
But the company also reported to state regulators that it had taken steps to prepare for negative impacts in the future and had incorporated reasonable estimates in future pricing and projected financial performance, according to a 2022 financial filing.
“Such future impacts, while potentially significant and subject to change, are not expected to have a material impact on UCare’s financial position,” the company stated.
Instead, the company’s losses kept piling up and UCare failed a financial trend test earlier this year, triggering the turnaround plan with the state.
The Department of Commerce said there is no public information to share when asked about the status of the turnaround plan.
Hilary Marden-Resnik, President and CEO of UCare said Monday’s announcement will help stabilize health coverage in Minnesota.
“This is a significant agreement that will enable us to preserve access to coverage for Minnesota’s most vulnerable members,” Marden-Resnik said in the release.
Why you should care:
UCare’s previously announced service cuts impacted policyholders across the state.
It cut Medicaid plans in 11 counties, impacting more than 88,000 people.
After terminating its Medicare Advantage contracts, UCare began “exploring opportunities to transition its members to a community-focused, nonprofit organization with aligned missions,” the press release stated.
Medica’s acquisition still needs regulatory approval but the company said the deal will likely be closed in the first quarter of 2026. Both companies stated they are “committed to providing a seamless experience” for UCare’s remaining policyholders.
“Individuals enrolled in UCare’s 2026 Medicaid and Individual and Family Plans will continue to receive services without interruption,” the release stated.
Providers or members with questions are encouraged to visit Medica.com or UCare.org for more information.
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