UCare terminates Medicare Advantage plans for next year and lays off more than 140

UCare, one of the largest providers of privatized Medicare in Minnesota, is trimming its workforce and will not offer Medicare Advantage health plans used by thousands of Minnesota seniors in 2026 as it facing financial headwinds.

As of today, 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% stake of Minnesota’s Medicare Advantage market, the nonprofit said.

Due to the coverage change, UCare will lay off 9% of its workforce, the nonprofit said Thursday. The cut amounts to an estimated 144 jobs, and is the second confirmed round of layoffs at the nonprofit this year.

If the Centers for Medicare & Medicaid Services accept UCare’s request to terminate its MA plans, prospective enrollees will need to find new coverage during Medicare’s annual enrollment period set to start in just over a month.

“This decision was not made lightly,” UCare CEO Hilary Marden-Resnik said in a statement Thursday. “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.

UCare’s decision to not offer MA coverage in 2026 will transform the state’s private Medicare market at a time when insurers face financial challenges from increases in health care service use and stagnant payment rates they say are insufficient.

UCare serves patients with publicly funded or subsidized health insurance. The insurer will continue offering supplemental plans for traditional Medicare, as well as MinnesotaCare coverage, 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 original Medicare administered by the federal government. But earlier this year, UCare stopped offering commissions for brokers who signed up new MA members.

UCare had an operating loss in 2023, which ballooned to more than $500 million in 2024.

UCare said in its statement Thursday that the cost of health care has dramatically increased in the past two years. Now, UCare is focusing its resources “on programs where it can have the most impact” to maintain stability, the nonprofit added.

Earlier this year the nonprofit health maintenance organization had said 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.

Blue Cross and Blue Shield of Minnesota is the only larger Medicare Advantage provider in Minnesota, with nearly 200,000 enrollees.

In May, UCare announced it was laying off 80 workers, eliminating vacant positions and halting most hiring as part of a turnaround plan. The layoff amounted to roughly 4% to 5% of the insurer’s workforce or about 1,600. With the Medicare Advantage-related job cuts, the nonprofit’s layoffs this year now likely exceed 200 employees.

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