UCare health insurer to shut down next year as financial losses mount

UCare, a nonprofit that’s been one of the largest providers of health care coverage for seniors, low-income Minnesotans and those who buy their own insurance, will shut down next year following strategic errors and a series of financial losses.

The exact timeline is unclear, but the Minneapolis-based insurer is announcing Monday about 300,000 people currently receiving Medicaid and Affordable Care Act benefits through UCare will transition to Medica, a nonprofit health insurer based in Minnetonka. UCare already announced ending its Medicare Advantage plans next year.

Sources tell the Minnesota Star Tribune the transaction will set the stage for winding down UCare in 2026. It’s too early to say how UCare’s closure will impact plan pricing in the wider market for government-funded insurance plans, which has been its primary business.

UCare’s downfall illustrates how financial fortunes can quickly turn for a relatively small health insurer that’s not diversified beyond government programs, where payment rates in recent years have gotten much tighter.

It’s also a cautionary tale in strategic failure. UCare suffered big losses in Medicaid while trying to expand its Medicare Advantage business, where losses deepened from ill-timed growth just as costs rose significantly.

https://www.startribune.com/ucare-health-insurer-to-shut-down-next-year-as-financial-losses-mount/601527418