UCare, one of the largest providers of privatized Medicare in Minnesota, is trimming its workforce and won’t offer Medicare Advantage health plans used by thousands of Minnesota seniors in 2026. Financial challenges drive the change.
The Minneapolis-based health insurer has 158,000 Medicare Advantage (MA) members who will have to find a new provider next year if they want to stay in the privatized version of Medicare. UCare controls a 26 percent share of Minnesota’s Medicare Advantage market.
Due to the coverage change, UCare will lay off about 144 workers or 9 percent of its workforce. The change requires approval from the federal Centers for Medicare & Medicaid Services.
UCare’s decision transforms the state’s private Medicare market at a time when insurers face financial challenges from increases in health care use and payment rates that insurers say are insufficient.
“This decision was not made lightly,” UCare CEO Hilary Marden-Resnik said in a statement. “UCare remains deeply committed to the health of Minnesotans and to supporting members through upcoming transitions.”
In 2025, UCare had the second-highest enrollment in the state for MA plans, which are Medicare-approved plans sold by private companies that may offer some extra benefits compared with traditional government-operated Medicare. Only Blue Cross and Blue Shield of Minnesota, with nearly 200,000 enrollees, has a larger Medicare Advantage business in Minnesota.
UCare serves patients with publicly funded or subsidized health insurance. The insurer will continue offering supplemental plans for traditional Medicare, as well as privatized Medicaid, MinnesotaCare, special needs plans, and individual and family plans on MNsure.
For decades, health insurers competed to grow their business in MA, which has become as popular as traditional Medicare administered by the federal government.
That has changed. Earlier this year, UCare stopped offering commissions for brokers who signed up new MA members. The insurer reported an operating loss in 2023, which ballooned to more than $500 million in 2024.
Other insurers face the same dilemma as MA patients have received far more medical care than projected.
UnitedHealthcare announced in July it will drop MA plans covering more than 600,000 people amid its own financial turmoil. In April, nonprofit HealthPartners said it was freezing enrollment in its Medicaid program and exiting a program for state residents with disabilities after losing nearly $200 million last year.
UCare announced recently that it would stop providing state and federally funded Medicaid coverage in 11 counties, including Ramsey County. The move came as the insurer looked to make up for losses in the Medicaid and Medicare Advantage programs.
Source: Star Tribune
