Hennepin Healthcare crisis deepens as UCare default leaves HCMC owed millions
Hennepin Healthcare is facing an acute financial crisis after losing more than $100 million in 2024 and being owed $115 million by collapsed nonprofit insurer UCare, with county leaders covering payroll, using $38 million a year in property taxes to plug losses, and bluntly warning HCMC is "on life support." Officials say the safety‑net hospital could begin a formal shutdown as early as May unless the Legislature redirects roughly $55 million a year from the Target Field sales tax or provides other aid, and they warn projected federal budget changes could cut about $1.7 billion from HCMC over the next decade. UCare’s Medicaid payouts ballooned in recent years and the insurer stopped paying hospitals in December, leaving Minnesota’s four largest systems collectively owed nearly $500 million as the Minnesota Department of Health oversees UCare’s shutdown and member transfer to Medica.
📌 Key Facts
- County leaders warn Hennepin County Medical Center (HCMC) could begin a formal shutdown process as early as May if the Legislature does not act; Hennepin Healthcare said it is "on life support and at risk of closure."
- Hennepin County is currently covering HCMC’s payroll, uses about $38 million a year in property taxes to cover hospital losses, and commissioners are asking lawmakers to redirect roughly $55 million a year from the Target Field 0.15% sales tax to keep the safety‑net hospital open.
- HCMC lost more than $100 million in 2024, is owed $115 million by collapsed nonprofit insurer UCare, and the Trump administration’s budget is projected to pull another $1.7 billion from HCMC over the next decade.
- State DHS data show UCare’s Medicaid payments to hospitals climbed from roughly $250–300 million a year (2018–2021) to about $315 million in 2022, nearly $500 million in 2024 and roughly $620 million in 2025; UCare stopped paying those hospital debts in December.
- The four largest hospital systems in Minnesota — Mayo, Allina, Fairview and Hennepin Healthcare — are collectively owed nearly $500 million by UCare.
- Despite the ballooning Medicaid payouts, UCare reported a record $325 million surplus in 2022 and told regulators the future impacts were "not expected to have a material impact" on its financial position.
- The Minnesota Department of Health took control of UCare in December, ordered the insurer to seek a merger, is overseeing its shutdown and is transferring members to Medica.
- An Allina attorney is arguing in court that the largest hospital systems should have a say in how UCare’s remaining assets are allocated to prevent a "domino effect of failures" across the state’s hospital network.
📊 Relevant Data
In 2023, 605,000 White Minnesotans and 470,000 BIPOC Minnesotans had Medicaid coverage, with 14% of non-Hispanic White Minnesotans enrolled compared to 50% of Black Minnesotans.
Medicaid in Minnesota: The who, what, where, why, and how — MN Compass
As of fiscal year 2024, 1.26 million Minnesotans were enrolled in Medicaid, representing 21.7% of the state's population.
Minnesota and Medicaid: What the data says — USAFacts
Medicaid costs in Minnesota have risen 42% since 2014, in line with a 41% nationwide increase.
Minnesota and Medicaid: What the data says — USAFacts
In 2025, 17,396 unauthorized immigrants were enrolled in MinnesotaCare, more than doubling the original projection of 7,700, with estimated costs rising to over $550 million in four years, fully funded by state taxpayers.
RELEASE: State-Funded Healthcare Costs for Unauthorized Immigrants Exceed Initial Projections by Double — Minnesota House of Representatives
The continuous coverage rule during the COVID-19 pandemic led to a steep rise in national Medicaid enrollment from 64.8 million in March 2020 to a peak of 87.4 million in April 2023.
What the data says about Medicaid — Pew Research Center
📰 Source Timeline (3)
Follow how coverage of this story developed over time
- FOX 9 obtained DHS data showing UCare’s Medicaid payments climbed from roughly $250–300M a year (2018–2021) to about $315M in 2022, then nearly $500M in 2024 and roughly $620M in 2025.
- Despite ballooning Medicaid payouts, UCare reported a record $325M surplus in 2022 and told regulators the future impacts were "not expected to have a material impact" on its financial position.
- The four largest hospital systems in Minnesota — Mayo, Allina, Fairview and Hennepin Healthcare — are collectively owed nearly $500M by UCare, and UCare stopped paying those debts in December.
- An Allina attorney is now arguing in court that the big systems should have a say in how UCare’s remaining assets are allocated to prevent a "domino effect of failures" in the state’s hospital network.
- MDH took control of UCare in December and is overseeing its shutdown and member transfer to Medica after ordering the insurer to seek a merger because of the mounting losses.
- County leaders are now openly warning that Hennepin County Medical Center could begin a formal shutdown process as early as May if the Legislature does not act.
- HCMC lost more than $100 million in 2024 alone and is owed $115 million by collapsed nonprofit insurer UCare; the Trump administration’s budget is projected to pull another $1.7 billion from HCMC over the next decade.
- Hennepin County is currently covering HCMC’s payroll and already uses $38 million a year in property taxes to plug hospital losses; commissioners are asking lawmakers to redirect roughly $55 million a year from the Target Field 0.15% sales tax to keep the safety‑net hospital open.
- Commissioner Angela Conley explicitly tied the red ink to HCMC’s role caring for patients who cannot pay, while Commissioner Jeffrey Lunde said the only alternatives are repurposing the tax or starting the closure process.
- Hennepin Healthcare released a blunt public statement saying 'Hennepin Healthcare is on life support and at risk of closure' and that only legislative action can stabilize operations.