Another 102 jobs cut as UCare liquidation continues

Another 102 workers will lose their jobs this fall as part of the shutdown at UCare, one of the state’s largest health insurers before it drowned last year in a sea of red ink.

Minneapolis-based nonprofit UCare announced in November it would be closing after mispricing coverage for Medicare Advantage beneficiaries and suffering big losses in running Medicaid health plans under contract with the state of Minnesota.

Some UCare employees kept working this year to help enrollees shift insurance to Medica, a rival health insurer based in Minnetonka that acquired the failed competitor’s Medicaid health plans.

About 102 people who have been working on this transition will be losing their jobs in October and November, according to a notice published Wednesday by the Minnesota Department of Employment and Economic Development.

“As of October 1, 2026, UCare’s support for the Medicaid contracts will cease, resulting in the layoff of 102 individuals,” wrote Don Roof, the special deputy commissioner at the Minnesota Department of Health, in a letter to the state employment agency.

The Health Department took over UCare’s operations last year through a court-ordered process called “rehabilitation.” The ultimate goal is liquidation.

Medicaid is the state-federal health insurance program for low-income people. UCare ran one of the state’s largest Medicaid health plans.

Founded in the 1980s, UCare was once one of Minnesota’s largest nonprofit health insurers. It was relatively unusual for specializing in health plans that provide government-funded benefits, while not competing in the large market for health plans sponsored by employers.

At the company’s peak, UCare was providing coverage to about 649,000 people who qualified for Medicaid and Medicare Advantage health plans, as well as coverage for individuals and families sold through the MNsure health insurance exchange.

In April, UCare still had about $1.1 billion in debt, much of it to hospitals for patients’ unpaid bills, but state officials say the insurer should have enough money to cover what it owes.

The firm hired by the state to handle UCare’s unwinding paid about $350 million in claims this spring, and was expected to start paying an additional $115 million in claims beginning the second week in July.

“All claims will not be paid before 2027,” according to a June update from the state’s rehabilitation agency.

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