Minneapolis-based nonprofit health care organization UCare announced Monday that it will wind down operations and shut down in 2026 after reporting significant financial losses, with fellow nonprofit insurer Medica taking control of some of its existing plans.
The closure follows a period of financial instability for UCare, which was founded more than 40 years ago primarily to offer health care coverage to low-income policyholders relying on Medicaid.
Tax records show UCare reported a $120 million loss in 2023. The organization engaged in a turnaround plan with the state of Minnesota after reporting a net income loss of nearly $500 million in 2024 and failing a financial trend test earlier this year. This dramatic fall follows a net income surplus of $325 million reported just two years prior in 2022.
Medica announced it will be acquiring UCare’s Medicaid and Individual and Family Plans. The agreement, which is subject to state regulatory approval, is expected to close in the first quarter of 2026.
UCare, which currently provides services to more than 300,000 members throughout Minnesota and parts of western Wisconsin, began exploring “opportunities to transition its members to a community-focused, nonprofit organization with aligned missions” after previously cutting Medicare Advantage plans due to rising costs.
“Combined, UCare and Medica have nearly a century of industry expertise and a shared commitment to community-driven coverage for those who need it most,” said Hilary Marden-Resnik, president and CEO of UCare. “This is a significant agreement that will enable us to preserve access to coverage for Minnesota’s most vulnerable members”.
Individuals enrolled in UCare’s 2026 Medicaid and Individual and Family Plans will continue to receive services without interruption. The Minnesota Department of Human Services (DHS) is actively working on an enrollment plan for roughly 25,000 people enrolled in UCare’s integrated Medicare and Medicaid products.
John Connolly, Minnesota Department of Human Services deputy commissioner and state Medicaid director, said, “We know any time there is an announcement like this, there can be confusion and concern,” adding, “For most enrollees, the process should be seamless, thankfully”.
Lisa Erickson, CEO of Medica, affirmed the commitment to members: “Throughout the coming weeks and months, continuity of care will be our greatest focus, as we ensure that UCare members feel cared for and confident in their ability to receive the care they need”.
Medica, based in Minnetonka, already serves more than 1.4 million members across nine states. Neither company has released information regarding the impact of the transition on UCare employees.