UCare’s Medicaid surge, $500M debt threaten Twin Cities hospitals
New DHS data show UCare’s Medicaid payouts more than doubled in three years to nearly $620 million in 2025, helping drive record losses that forced state regulators to seize control of the insurer and order a merger, FOX 9 reports. From 2018 through 2021 UCare was already the state’s largest Medicaid managed‑care outfit, paying out $250–300 million a year, but it still posted a $325 million surplus in 2022 and told regulators that future impacts were "not expected" to materially hurt its finances — a forecast that turned out to be fiction as Medicaid claims ballooned and it lost about $478 million in 2024 alone. Court filings now say Mayo, Allina, Fairview and Hennepin Healthcare are owed nearly $500 million for care they’ve already delivered to UCare members, and UCare simply stopped paying those debts in December. An attorney for Allina is warning a judge that unless hospitals get a real say in how UCare’s remaining assets are carved up, the failure of one state‑blessed Medicaid plan could trigger a "domino effect" of hospital cuts or failures, with HCMC — already threatening closure — squarely in the blast radius. For metro residents who depend on Allina, Fairview and especially Hennepin Healthcare, the story underlines just how exposed the local safety‑net is to bad actuarial bets and slow‑footed oversight in the state’s outsourced Medicaid system.
📌 Key Facts
- UCare’s Medicaid payouts rose from roughly $250–300M a year (2018–2021) to about $315M in 2022, nearly $500M in 2024, and almost $620M in 2025.
- Despite warning signs in its payout curve, UCare reported a $325M surplus in 2022 and told regulators future impacts were not expected to materially affect its finances.
- The four largest Minnesota hospital systems — Mayo, Allina, Fairview and Hennepin Healthcare — are owed nearly $500M by UCare, and the insurer stopped paying on that debt in December.
- The Minnesota Department of Health took control of UCare in December 2025, ordering a merger and supervising a shutdown that is shifting members to Medica.
- An Allina attorney told the court hospitals must have a voice in how UCare’s remaining resources are distributed to avoid a "domino effect of failures" in the state’s healthcare system.
📊 Relevant Data
In Minnesota, the racial/ethnic breakdown of Medicaid enrollees is approximately 36% White, 19% Black, 24% Hispanic, 4% Asian, 1% American Indian or Alaska Native, 1% Native Hawaiian or Pacific Islander, 2% other, and 13% unknown.
In Minnesota, the population is approximately 75.56% White, 7.11% Black, 6.4% Hispanic or Latino, 5.17% Asian, 1.2% American Indian, 3.58% two or more races, and 0.98% some other race.
1 in 4 Minnesotans are people of color, latest Census data shows — Sahan Journal
Black individuals are overrepresented in Minnesota's Medicaid program, comprising 19% of enrollees while making up only 7.11% of the state's population.
Hispanic individuals are overrepresented in Minnesota's Medicaid program, comprising 24% of enrollees while making up only 6.4% of the state's population.
Minnesota ranks fifth highest in refugee resettlement rate nationally, with 52 arrivals per 100,000 residents in 2024, totaling nearly 3,000 refugees, contributing to demographic changes and potentially higher public service demands.
The past, present, and future of immigration in Minnesota — MN Compass
In 2025, a state policy allowed undocumented Minnesotans to enroll in MinnesotaCare starting January 1, leading to over 17,000 enrollments, which was higher than the estimated 7,700.
READ: "Over 17,000 illegal immigrants are enrolled in MinnesotaCare" — Minnesota House Republicans (Facebook)
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