Following historic financial losses last year, UCare is halting Medicare Advantage enrollment as part of a recovery plan that may involve layoffs. The actions were taken in spite of a sharp 20% increase in its Medicare health plan business, which at other times would have been an unqualified success.
UCare revealed this week in a filing with state regulators that its 2024 operating loss was $504 million, by far the worst annual financial results in 15 years of statistics examined by the Minnesota Star Tribune.
The Minneapolis-based health insurer informed insurance agents in late March that commissions to brokers for new Medicare Advantage enrollments will be suspended starting on July 1st, which can be explained in part by the operating deficit.
The move should improve UCare’s finances by slowing down red ink where premiums aren’t matching expenses, as such plans have faced higher-than-expected costs.
In a statement released on Wednesday, UCare CEO Hilary Marden-Resnik said, “Last year’s financial results reflect continued challenges of rising medical and specialty medication costs, and higher use of services outpacing government payments.” “To guarantee long-term stability for our members, providers, and partners, we are putting our multi-year strategic plan into action.”
In a statement released on Wednesday, UCare CEO Hilary Marden-Resnik said, “Last year’s financial results reflect continued challenges of rising medical and specialty medication costs, and higher use of services outpacing government payments.” “To guarantee long-term stability for our members, providers, and partners, we are putting our multi-year strategic plan into action.”
UCare responded to inquiries by saying, “We have not yet determined if layoffs will be needed.” “We are developing strategies to prevent or reduce the need for layoffs because we have an exceptional workforce.” We’re making every effort to prevent layoffs.
UCare’s overall financial reserves dropped from nearly $1.1 billion at the end of 2023 to roughly $595 million at the end of last year, resulting in an operational deficit of about half a billion dollars in 2024.
A UCare representative stated in an email that “some of the items detailed in our turnaround plan are already mitigating losses in 2025.” “We’re sure we’ll end the year with a better outlook, and we won’t use up our surplus.”
After a tumultuous open enrollment period last fall, when multiple Minnesota health systems threatened to withdraw from the Medicare Advantage network at Minnetonka-based UnitedHealthcare and Kentucky-based Humana, UCare has witnessed a significant increase in Medicare enrollment over the last four months. In the end, UnitedHealthcare stayed in the network.
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