UCare Closes; Medica Assumes Healthcare Plans

UCare, a Minnesota health insurer, is set to close its operations in 2026. Medica, another Minnesota-based nonprofit health maintenance organization, will acquire UCare’s existing health plans related to Medicaid, family, and individual markets. This decision comes after UCare faced significant financial struggles and a half-billion-dollar loss.

Overview of UCare’s Closure

Founded over 40 years ago, UCare provided vital healthcare coverage for low-income individuals, particularly those relying on Medicaid. Currently, it serves over 300,000 members across Minnesota and parts of Western Wisconsin. However, rising healthcare costs have strained UCare’s operations.

Financial Struggles

• In 2024, UCare reported a net income loss of nearly $500 million.
• This was a stark contrast to the $325 million surplus reported just two years prior.

UCare attributed the previous surplus to exceptional circumstances during the pandemic. In 2022, the company took measures to adjust its financial strategies, anticipating future difficulties. However, these efforts failed to prevent a series of substantial losses.

Impact on Policyholders

The upcoming transition to Medica is expected to mitigate some of UCare’s previous service cuts, which have affected over 88,000 individuals in 11 counties. UCare had previously scaled back its Medicaid offerings and exited the Medicare Advantage market.

Medica’s Acquisition and Future Plans

Medica’s acquisition of UCare’s health plans was formally announced in a press release. According to Lisa Erickson, CEO of Medica, the goal is to enhance the care experience for members while honoring UCare’s legacy in the community.

Commitments to Members

• UCare’s policyholders will continue receiving services without interruption post-acquisition.
• The deal is pending regulatory approval and is expected to finalize in the first quarter of 2026.
• Both organizations are dedicated to ensuring a smooth transition for all affected members.

Conclusion

As UCare prepares for its closure, Medica’s acquisition offers a glimmer of hope for maintaining healthcare access among the affected populations. Stakeholders encourage members with questions to seek assistance through the respective websites of Medica and UCare.