UCare is in the throes of a state takeover in Minnesota, with health systems and former employees voicing concerns over the insurer’s rehabilitation.
The insurer posted an operating loss of $504 million in 2024 and shared plans to exit the Medicare Advantage market. UCare also scaled back its Medicaid service area, affecting 88,000 beneficiaries.
As of December, UCare planned to lay off about 250 employees — and possibly another 450 — and agreed to hand off its remaining Medicaid and ACA businesses to Medica. Minnesota also assumed control of UCare, meaning the state would manage the organization’s finances and assets.
Here are four notes on where UCare’s shutdown stands:
1. On Feb. 13, Minnesota Department of Health Commissioner Brooke Cunningham, MD, objected to intervention efforts on behalf of Minneapolis-based Hennepin Healthcare and Rochester, Minn.-based Mayo Clinic. She also objected to Minneapolis-based Fairview Health Services’ attempt on Jan. 30.
2. A group of former UCare employees shared a letter with Becker’s on Feb. 3 alleging UCare misled members and regulators and had conflicts of interest in its business. The letter also said “executives of color positioned near the C-suite carried an unspoken expiration date.” The employees called UCare’s situation a “leadership failure.” When contacted about the letter, the state of Minnesota said it could not comment on ongoing litigation. UCare also declined to comment.
3. The state estimates UCare owes providers $900 million but could retain $84 million in equity, according to a Feb. 3 court filing.
4. Along with Fairview, Hennepin and Mayo Clinic, Minneapolis-based Allina Health and New Brighton, Minn.-based Sagent Behavioral Health have expressed interest in the proceedings, according to court records. The health systems trying to intervene allege a total of nearly $500 million in unpaid obligations on the part of UCare.
This story was originally published Feb. 11 and updated Feb. 19. Becker’s will continue to update it if new information becomes available.
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